A special needs trust (SNT) is a trust for a disabled beneficiary that doesn’t jeopardize the beneficiary’s eligibility for needs-based government benefits. SNT funds can generally be used to pay for almost anything that falls outside of basic support.

There are two main types of SNTs: first-party and third-party. The main difference between them is that the former holds funds that the beneficiary owns or receives in a lump sum and puts into the trust, and the latter holds funds given to the beneficiary by a parent, grandparent, or other individual. One key difference between first-party and third-party SNTs is that when the beneficiary dies, funds in a third-party SNT are not subject to reimbursement to the state for up to the amount of the government benefits the beneficiary received during their lifetime.

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