Special Needs Trust in Florida

For families with a loved one who has a disability, one of the most urgent estate planning questions is this: how do you leave money to a disabled family member without cutting off the government benefits they depend on? A Florida special needs trust is the answer in most cases. It is a specialized legal tool that holds assets for a disabled beneficiary in a way that preserves their eligibility for Medicaid, SSI, and other need-based programs, while still allowing the trust to improve their quality of life.

At Elder Needs Law, our Florida Medicaid planning attorneys and estate planning attorneys handle special needs trusts throughout Florida from our offices in Aventura, Boca Raton, Plantation, and Spring Hill. If a family member is receiving government benefits and is about to receive an inheritance, a personal injury settlement, or another lump sum, understanding your trust options is urgent, acting quickly is often critical to preserving those benefits.

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What Is a Special Needs Trust

A special needs trust is an irrevocable trust designed to hold and manage assets for a person with a disability without those assets counting against the beneficiary for Medicaid or SSI purposes. Under federal law, assets held in a properly drafted special needs trust are not considered countable resources for Medicaid or SSI eligibility, regardless of how much money is in the trust. The trust is managed by a trustee who uses the funds to supplement, not replace, what government benefits cover.

Special needs trusts are only available to people who meet the federal definition of "disabled" under 42 USC 1382c(a)(3)(A), meaning a medically determinable physical or mental impairment that prevents substantial gainful activity. For a broader overview of the different Florida Medicaid long-term care programs that may intersect with a special needs trust, our article covers each one in detail.

When a Special Needs Trust Is Needed

A Medicaid recipient receives an unexpected lump sum

If a person who is already receiving Medicaid or SSI comes into money, through a personal injury settlement, inheritance, divorce settlement, or any other source, that money lands in their name and immediately threatens their benefits. Every dollar above $2,000 in countable assets triggers a review. A first-party special needs trust allows that money to be moved out of the beneficiary's individual name and into the trust, protecting benefit eligibility without spending or giving away the assets.

A parent wants to leave money to a disabled child without jeopardizing benefits

This is the most common scenario. A parent or grandparent wants to leave their disabled child or grandchild an inheritance, but doing so directly would disqualify that person from Medicaid or SSI. The solution is a third-party special needs trust created in the parent's will or revocable trust. Upon the parent's death, the trust comes into existence, a trustee steps in, and the funds are used to supplement what government programs provide, without counting against the beneficiary's eligibility.

A Medicaid applicant earns too much income to qualify

Florida is an income cap state for Medicaid. As of 2026, if a Medicaid applicant's gross monthly income exceeds $2,982, they are over the income limit and will be denied benefits, unless they establish a Qualified Income Trust (Miller Trust). This is a special type of irrevocable trust that holds the excess income each month, allowing the applicant to qualify for Medicaid despite being over the limit. The Miller Trust is discussed in more detail below.

Types of Special Needs Trusts in Florida

First-party special needs trust (d4A trust)

A first-party or self-settled special needs trust is funded with the beneficiary's own assets. It is used when a disabled person under the age of 65 receives or already owns assets that would disqualify them from benefits. Common funding sources include personal injury settlements, inheritances received directly, and divorce proceeds. Since the 21st Century Cures Act took effect in December 2016, disabled individuals under 65 may now establish their own first-party trust without requiring a parent, grandparent, or court to do it for them.

Key characteristics of a first-party trust: it must be irrevocable, the beneficiary must be under 65, the trustee is usually a professional institution, and the trust must contain a Medicaid payback provision. This means that when the beneficiary dies, any remaining trust assets must first reimburse Florida's Medicaid program for benefits provided during the beneficiary's lifetime before passing to other beneficiaries.

For a detailed guide on first-party trusts and their requirements, see our full article.first-party special needs trusts.

Miller Trust and Qualified Income Trust (d4B trust)

The Miller Trust or Qualified Income Trust is a specific type of first-party special needs trust used exclusively to solve an income problem for Medicaid applicants. It does not hold general assets, it holds only income. Each month, the applicant deposits their excess income (above $2,982 as of 2026) into the trust. The trustee then pays allowable expenses from the trust, bringing the applicant's countable income within the Medicaid limit.

The trust must be established before the Medicaid application is submitted. If the applicant has lost capacity, a properly drafted durable power of attorney can be used to establish the trust on their behalf. If there is no power of attorney and the applicant cannot sign, a guardianship proceeding may be required.

This is a critical area where the income cap figure matters. The current 2026 income limit is $2,982 per month, not the $2,199 figure that appeared on this page previously, which has been outdated since 2016.

Pooled special needs trust (d4C trust)

A pooled special needs trust is managed by a nonprofit organization that maintains individual sub-accounts for each beneficiary, while pooling the assets together for investment purposes. The beneficiary joins the trust by signing a joinder agreement rather than establishing a separate trust. Pooled trusts are available for both first-party and third-party funding, and unlike first-party d4A trusts, they can be established for a beneficiary of any age, including those over 65.

Pooled trusts are often the right choice when the amount of money is not large enough to justify the administrative costs of an individual first-party trust, or when an elderly applicant over 65 needs to resolve an asset problem to qualify for Medicaid. A pooled trust can also function as both an asset trust and a Qualified Income Trust simultaneously, solving both an income and an asset problem at once.

Third-party special needs trust

A third-party special needs trust is funded with assets belonging to someone other than the beneficiary, most commonly a parent, grandparent, or other family member. This is the trust used in estate planning when a parent wants to leave part of their estate to a disabled child without disqualifying that child from benefits. Third-party trusts carry no Medicaid payback requirement, which means any funds remaining in the trust when the beneficiary dies can pass to other named beneficiaries rather than reimbursing the state.

A third-party trust can be created as a standalone document or embedded within a parent's revocable trust or will. For married couples where one spouse may need nursing home care, a third-party special needs trust can also be structured so that the well spouse's estate does not inadvertently disqualify the ill spouse from Medicaid. This requires careful coordination with overall Medicaid planning.

What a Special Needs Trust Can and Cannot Pay For

The core rule is that trust funds must supplement government benefits, not replace them. Distributions that duplicate what Medicaid already pays for can reduce or eliminate those benefits. Cash payments and payments for food and shelter are the most problematic distributions because they are counted as In-Kind Support and Maintenance under SSI rules, which can reduce the monthly SSI benefit.

Distributions the trust can typically make without affecting benefits

Medical services, therapies, and equipment not covered by Medicaid. Technology including computers, tablets, phones, and communication devices. Transportation and vehicle costs. Clothing and grooming services. Entertainment and recreation. Educational supplies and tuition. Personal care items. Home furnishings, bedding, and household goods. Legal, accounting, and financial advisory fees. Prepaid funeral and burial arrangements established before the beneficiary's death.

Distributions that require careful handling

Cash given directly to the beneficiary. Payments for food, groceries, or restaurant meals. Payments for housing costs such as rent, mortgage, utilities, or property taxes. These distributions are not necessarily prohibited, but they may reduce the beneficiary's SSI benefit dollar for dollar up to one-third of the SSI payment standard. A trustee should always consult with a special needs planning attorney before making these types of distributions.

ABLE Accounts as a Complement to a Special Needs Trust

An ABLE account is a tax-advantaged savings tool that works alongside, but not replacing, a special needs trust. As of January 1, 2026, two major changes expanded ABLE account access. The age eligibility threshold increased from disability onset before age 26 to disability onset before age 46, meaning millions more individuals now qualify. The annual contribution limit also increased to $20,000 per year from any combination of sources including family members, friends, and third parties.

Up to $100,000 in an ABLE account is not counted toward the $2,000 SSI asset limit. For Medicaid, any amount up to Florida's program limit does not affect eligibility. The account is controlled directly by the beneficiary or their representative, no trustee is required. For a detailed comparison of when to use an ABLE account versus a special needs trust, or both together, our article on ABLE accounts vs special needs trusts covers the decision framework.

How a Special Needs Trust Interacts With Florida Medicaid

A properly drafted and administered special needs trust does not count as a resource for Medicaid eligibility purposes because the beneficiary lacks direct control over the assets. However, the trust must be structured correctly, and the trustee must make distributions carefully. The specific rules differ depending on whether the trust is a first-party or third-party trust, and whether Medicaid or SSI is the relevant benefit.

Estate planning for families with a Medicaid recipient also involves coordinating with the Medicaid look-back period and with estate planning documents to make sure nothing in the overall plan inadvertently creates a problem. Our Florida Medicaid planning attorneys review all trust documents alongside the full Medicaid plan before they are executed. We also work with families on guardianship planning for situations where the disabled beneficiary lacks capacity to manage their own affairs.

Special Needs Trust Services in Florida

Boca Raton and Palm Beach County

Our Boca Raton office serves Palm Beach County families by appointment, including Boca Raton, Delray Beach, Boynton Beach, Lake Worth, and Wellington. Palm Beach County families frequently contact us when a family member with a disability stands to receive an inheritance or personal injury settlement that could jeopardize existing Medicaid or SSI benefits. We handle SNT drafting, trust administration reviews, and coordination with the Social Security Administration and the Florida Department of Children and Families.

Aventura and Miami-Dade County

Our Aventura main office serves families throughout Miami-Dade County, from Aventura and North Miami Beach to Kendall and Coral Gables. We draft standalone special needs trusts, testamentary trusts embedded in wills and revocable trusts, and pooled trust joinder agreements for beneficiaries of all ages.

Plantation and Broward County

Our Plantation office serves Broward County families by appointment, covering Fort Lauderdale, Hollywood, Pembroke Pines, and all surrounding communities. We also assist trustees in Broward County with ongoing trust administration questions and distribution planning.

We serve all of Florida remotely for families who prefer to handle their special needs planning online or by phone. Distance is not a barrier.

Ready to Set Up a Special Needs Trust in Florida

We care. We listen. We can help. Our board-certified elder law attorneys serve all of Florida from offices in Aventura, Boca Raton, Plantation, and Spring Hill.

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Frequently Asked Questions

Q. What is the difference between a first-party and a third-party special needs trust

A. A first-party trust is funded with the beneficiary's own assets, for example, a personal injury settlement or an inheritance received directly. It must include a Medicaid payback provision and cannot be used for beneficiaries over 65. A third-party trust is funded by someone else, such as a parent or grandparent, and has no Medicaid payback requirement. Remaining assets in a third-party trust can pass to other named beneficiaries when the disabled person dies.

Q. Can a special needs trust affect Medicaid eligibility

A. A properly drafted and administered special needs trust does not count against the beneficiary for Medicaid eligibility because the beneficiary lacks direct control over the assets. However, the trust must be structured correctly and administered carefully. Certain types of distributions, particularly cash payments and payments for food or shelter, can reduce SSI benefits. Trustees should work with a special needs planning attorney to develop a distribution plan.

Q. What is a Miller Trust and when is it needed

A. A Miller Trust, also called a Qualified Income Trust or QIT, is used when a Medicaid applicant's gross monthly income exceeds Florida's income cap of $2,982 as of 2026. By depositing excess income into the trust each month, the applicant's countable income falls within the Medicaid limit. Our detailed guide on Miller Trusts in Florida explains the setup and administration process.

Q. Can a pooled special needs trust be used by someone over 65

A. Yes. Pooled trusts are one of the only special needs trust options available to individuals over 65. A first-party d4A trust cannot be established for a beneficiary over 65. A pooled trust can be established at any age. For elderly individuals who need to resolve both an income and an asset problem to qualify for Medicaid, a pooled trust can serve both purposes simultaneously.

Q. Should I use an ABLE account or a special needs trust

A. Both serve different purposes and are often used together. An ABLE account gives the beneficiary direct control over savings up to $100,000 without affecting SSI, with a $20,000 annual contribution limit as of 2026. A special needs trust can hold an unlimited amount and is managed by a trustee. An ABLE account is better for spending flexibility and smaller amounts. A special needs trust is better for large lump sums and long-term asset protection. Our article on ABLE accounts vs special needs trusts covers the decision in detail.

Q. What does a special needs trust trustee actually do

A. The trustee manages and invests trust assets, evaluates distribution requests, makes payments for approved expenses, files required tax returns, maintains trust accounting, and coordinates with government agencies when needed. For a first-party trust, the trustee is typically a professional institution such as a bank or trust company. For a third-party trust, a trusted family member can serve as trustee. A well-drafted trust document clearly defines the trustee's powers and the distribution standards the trustee must follow.

Q. What happens to a first-party special needs trust when the beneficiary dies

A. When the beneficiary of a first-party special needs trust dies, any remaining trust assets must first be used to reimburse Florida's Medicaid program for the cost of benefits provided during the beneficiary's lifetime. After Medicaid is reimbursed, any remaining funds can pass to named secondary beneficiaries. Third-party special needs trusts have no such payback obligation, remaining assets pass directly to whoever the trust names.

Talk to a Florida Special Needs Trust Attorney Today

Do not wait until a benefit crisis forces the issue. Planning ahead gives your family the most options. We serve all of Florida from offices in Aventura, Boca Raton, Plantation, and Spring Hill.

Call us at (305) 419-3369

Schedule a Consultation Online

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