A special needs trust—also known as a supplemental needs trust—is an irrevocable trust designed to provide supplemental income for a designated beneficiary who is physically disabled, mentally disabled, has chronic illness, or has other special needs and is receiving or may be eligible to receive government benefits—such as Social Security, Supplemental Security Income (SSI), Medicare, or Medicaid.

A special needs trust is often created by parents of a disabled child, with the trust prohibiting distributions from being used for the child’s food, clothing, or shelter to ensure the child (or adult) remains eligible for related government benefits. A special needs trust must be created before the beneficiary reaches the age of 65.

In South Carolina, a special needs trust (SNT), also known as a supplemental needs trust, is a legal arrangement that allows individuals with disabilities to have funds set aside for their benefit without jeopardizing their eligibility for government assistance programs like Social Security, Supplemental Security Income (SSI), Medicare, or Medicaid. These trusts are designed to provide for the extra and supplemental needs of the beneficiary, beyond what government benefits cover, without disqualifying them from receiving such benefits. The trust assets can be used for a variety of life-enhancing expenditures without compromising the beneficiary's eligibility. In South Carolina, as in other states, the trust must be established before the beneficiary turns 65 years old. It is important to ensure that the trust is properly structured and administered to comply with both federal regulations and South Carolina state laws to maintain the beneficiary's eligibility for public benefits. An attorney with experience in special needs planning can provide invaluable assistance in setting up an SNT in accordance with the specific legal requirements.