If you have a child or loved one with a disability, you know that protecting their future is about more than just love—it’s about planning. In Texas, one of the most effective ways to provide for a family member with special needs is through a Special Needs Trust (SNT).
At Gray Castle Law, we help families establish legally sound and compassionate special needs trusts that protect your loved one’s eligibility for government benefits like Medicaid and SSI, while still ensuring they have the resources they need to live with dignity, support, and opportunity.
What Is a Special Needs Trust?
A Special Needs Trust is a specialized legal trust that holds money and property for the benefit of a person with a disability without disqualifying them from public benefits.
Here’s how it works:
- A trustee (someone you choose) manages the trust and uses it to pay for things that improve the beneficiary’s quality of life.
- The trust owns the assets, so they are not counted as the beneficiary’s personal resources.
- This allows the beneficiary to remain eligible for needs-based benefits, such as:
- Medicaid
- Supplemental Security Income (SSI)
- HUD housing
- Medicare subsidies
- And other government programs
Why Is a Special Needs Trust Important?
If a person with disabilities receives more than $2,000 in assets directly (such as through inheritance, lawsuit, or gift), they could:
- Immediately lose Medicaid eligibility,
- Be disqualified from SSI, and
- Be forced to spend down their assets before requalifying.
A Special Needs Trust avoids this by holding and managing the assets without giving the beneficiary direct control—protecting both their benefits and their financial future.
What Can a Special Needs Trust Pay For?
Government programs like SSI and Medicaid only cover basic necessities (food, shelter, medical care). A Special Needs Trust can pay for the extras that make life fuller and more independent, including:
- Private caregivers or home health aides
- Out-of-pocket medical expenses
- Housing expenses (rent, utilities, furniture)
- Education, tutoring, or job training
- Travel and recreation
- Computers, cell phones, internet access
- Clothing, transportation, and personal care items
The trustee must make payments directly to vendors, not to the beneficiary.
Who Needs a Special Needs Trust?
You should consider a Special Needs Trust if:
- You have a child with autism, Down syndrome, cerebral palsy, or other developmental or physical disabilities.
- You want to leave an inheritance to a family member with special needs.
- Your loved one is on SSI or Medicaid, or may apply in the future.
- You’re concerned about what will happen when you’re no longer able to care for them.
- Your loved one received or will receive a personal injury settlement or other lump sum.
Types of Special Needs Trusts in Texas
Third-Party Special Needs Trust
- Funded by someone other than the disabled person (e.g., parent, grandparent).
- Often used in estate planning—assets pass directly into the trust at your death.
- Not subject to Medicaid payback after the beneficiary’s death.
First-Party (Self-Settled) Special Needs Trust
- Funded with the beneficiary’s own assets (like an injury settlement).
- Must comply with federal and state Medicaid rules.
- Medicaid must be reimbursed from the trust when the beneficiary dies.
At Gray Castle Law, we help determine which trust is best for your family’s needs.
How a Special Needs Trust Differs from a Simple Will
| Feature | Will | Special Needs Trust |
|---|---|---|
| Protects government benefits |  No | Yes |
| Immediate use of funds | Probate required | Avoids probate |
| Ongoing management | No | Trustee-controlled |
| Custom spending rules | No | Yes – HEMS standard |
| Medicaid-safe structure | No | Yes (if drafted properly) |
A will alone can actually harm your child with special needs—by giving them an inheritance that disqualifies them from benefits.
A Special Needs Trust works with your will and other estate documents to protect both financial resources and government eligibility.
Building a Thoughtful Plan with a Pour-Over Will and Living Trust
A well-designed estate plan may include:
- A Revocable Living Trust that avoids probate,
- A Pour-Over Will that directs any forgotten assets into your trust, and
- A Special Needs Trust as a sub-trust for your disabled loved one, triggered upon your death.
At Gray Castle Law, we carefully coordinate all of these tools to work together—ensuring nothing is left out or left to chance.
How Gray Castle Law Can Help You
At Gray Castle Law, we understand that planning for a loved one with special needs requires both legal precision and deep compassion.
We help Texas families:
- Determine the right type of special needs trust,
- Draft a trust that complies with state and federal rules,
- Appoint the right trustee or trust protector,
- Integrate your trust with your overall estate plan, and
- Guide you through funding the trust, so it works when it matters most.
We also offer trustee education and support for successor caregivers—because the plan only works when everyone understands it.
Schedule a Planning Session Today
A Special Needs Trust is more than just a legal document—it’s a lifeline for your loved one’s future. Let us help you create the peace of mind you and your family deserve.
Call Gray Castle Law at [Insert Phone Number]
Or schedule online at graycastlelaw.com/consultation
Your child’s future deserves a plan. We’ll help you build it.