Given today’s longer life spans, you may wish to develop a plan for the possibility that you may
experience a disability in later years that impairs your ability to manage financial affairs. This is one
reason a person may transfer assets to a revocable trust and name himself as both beneficiary and
trustee. The trust document would include language detailing specific criteria to establish diminished
capacity, at which point your pre-appointed successor trustee would take over management of trust
A special needs trust, also known as a supplemental needs trust, is designed to preserve eligibility for
government benefit programs for a disabled beneficiary – such as a child. This irrevocable trust enables
you to leave assets to help meet the future supplemental needs of someone with a mental or physical
disability. Without such a trust, ownership of assets totaling anywhere from $2,000 to $5,000,
depending on the disabled individual’s particular situation, would disqualify that disabled beneficiary
from receiving most federal needs-based assistance, such as Medicaid and Supplemental
Security Income.
A special needs trust can be funded with a variety of assets, including cash, stocks, mutual funds,
insurance, and property. Once a trust is established for a beneficiary, the designated trustee has full
discretion to distribute trust assets as he or she sees fit – with the guiding purpose of enhancing the life
of the beneficiary.
Because a special needs trust is managed by a separate trustee, the beneficiary does not have any legal
rights to the trust assets. This structure offers three advantages: (1) the beneficiary may qualify for
government benefits, (2) the beneficiary still receives the beneficial use of his or her inheritance, and (3)
trust assets are protected from lawsuits and creditors.

Changes in tax laws or regulations may occur at any time and could substantially impact your situation. Raymond James
financial advisors do not render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate
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