Special needs trusts in are an invaluable tool for protecting children with special needs. The most common type of trust that we see used for this purpose is what is referred to as a “3rd party” supplemental needs trust. This kinds of trust is often created by parents who want to make sure that if something happens to them, their child will not lose access to valuable government benefits.
In case you are wondering, the reason for this concern is that an inheritance left outright to a child (adult or minor) is considered a resource to the child which may put them over the asset limit for needs-based government benefits such as Medicaid (Title 19) and SSI.
The Supplemental needs trust avoids this by allowing for availability of assets for needs that are supplemental to needs-based government benefits.