Your first question is probably, What is a disability trust? Ray Parri says, "Simply stated a disability trust is established under OBRA '93 and is setup specifically for the benefit of a disabled person."

This irrevocable trust allows a disabled person to receive SSI (supplemental security income), nursing home benefits and medical assistance under the Medicaid program while preserving assesses and income for special needs. Naturally, there are certain guidelines for this kind of trust to qualify as a disability trust. They are: the individual for whom this trust is established must be under 65 years of age; the individual must meet the definition of disabled under Social Security; the trust must be funded by a parent, grandparent, legal guardian or a Court; only assets and income of the individual can be contributed; the trust must be for the sole benefit of the individual in the individual's lifetime; and, the State must be reimbursed for payments made on behalf of the individual from the assets after death with any remainder going to a residual beneficiary.

After age 65, no additional contributions can be made to the trust. If a nursing home is involved, there will be a patient responsibility as determined by the case worker.

You might say, what's the purpose? The purpose is to preserve assets for special needs and not just medical needs. As you know, frequently, medical expenses are extremely costly for the disabled. It's a way to plan for a disabled individual after parents pass away. As you know, one of the most important parts of anything is to have a plan. Having a disability trust and qualifying for SSI can make a big difference in the life style of that disabled person.