Blogs :: What Expenses Cannot Be Paid for with a Special Needs Trust

Those with disabilities who receive government benefits like SSI (Supplemental Security Income) and Medicaid often need additional funds in their lifetime. In order to provide funds while protecting the public benefits, a Special Needs Trust can be created for expenses that cannot be paid for by government benefits. There is an asset limit for those receiving SSI benefits and exceeding this limit will likely terminate SSI and Medicaid.

Not every expense can be paid for with a Special Needs Trust. Certain provided funds regularly used for food and shelter will count as income to the beneficiary. It is essential that the trustee be mindful of how the trust assets are distributed to the beneficiary.

The following should not be paid directly through a Special Needs Trust without consultation of a Special Needs attorney:

  • Cash given directly to the beneficiary for any purpose
  • Food or groceries
  • Restaurant meals (except if given as an occasional gift)
  • Rent or mortgage payments
  • Property taxes
  • Homeowner or condo association dues
  • Homeowner's insurance (if the insurance is a mortgage requirement)
  • Utilities (electricity, gas, water, etc.)
  • Utility hookup or connection charges

While disbursements for the above purchases may only result in a reduction in SSI payments, it is still advisable to check with a Special Needs attorney for counsel prior to withdrawing money for these purposes. To arrange for a consultation with an attorney, contact Boyd Handley at The Handley Law Office: 281.703.3616 or

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