Florida Special Needs Planning Attorney

A complete guide to protecting your loved one's Medicaid and SSI while paying for everything those benefits leave out

A single well-meaning gift can undo years of benefits. When a grandparent leaves money straight to a grandchild who receives SSI, the monthly checks can stop within weeks.

In most Florida cases, money placed in a properly drafted special needs trust does not count against Medicaid or Supplemental Security Income (SSI), so your loved one keeps their benefits and still gets the help the trust pays for. Whether the plan holds up comes down to a few things. The one figure that drives all of it is the $2,000 resource limit behind SSI and Medicaid, a cap unchanged since 1989, which is why even a small inheritance can end benefits and why the trust matters so much.

Three things decide the outcome.

• Whose money funds it. A parent's money goes into a third-party trust with no Medicaid payback. The disabled person's own money goes into a first-party trust that must repay Medicaid at death.
• Whether it meets the federal rule. The trust has to satisfy 42 U.S.C. section 1396p(d)(4) to stay out of the resource count.
• How the trustee pays. Cash handed to the beneficiary still reduces SSI, so distributions need care.

This page walks through each piece, from the types of trusts to the 2026 ABLE rules, and points to deeper guides on the parts that affect your family.

Key takeaways

• A properly drafted special needs trust keeps assets from counting against Medicaid and SSI, so a gift, inheritance, or settlement does not end benefits.
• Whose money funds the trust decides everything. Third-party trusts, funded with a parent's money, have no Medicaid payback. First-party trusts, funded with the beneficiary's money, must repay Medicaid at death.
• Since September 30, 2024, trustees can pay for a beneficiary's food without reducing SSI. Shelter costs can still reduce it.
• ABLE accounts opened up on January 1, 2026 to anyone disabled before age 46, with up to $100,000 protected and a $19,000 annual contribution limit for 2026.
• The trustee's choices matter as much as the document. Many families pair a trust, an ABLE account, and clear decision-making authority.

How the law treats special needs planning

Special needs planning sits inside the wider field of Florida elder law, but it runs on two layers of law of its own. Federal law sets the benefit rules, and Florida law governs the trust itself.

Federal Medicaid law, at 42 U.S.C. section 1396p(d)(4), is the source of the exception that lets a disabled person hold assets in trust without losing benefits. It authorizes first-party trusts under paragraph (d)(4)(A) and pooled trusts run by nonprofits under (d)(4)(C). In plain terms, this one federal section is the reason a special needs trust works at all.

On the Florida side, the Florida Trust Code governs how the trust is created and managed. Florida Statutes section 736.04117 defines a supplemental needs trust as one the trustee believes will not be counted as a resource for benefit eligibility, and it lets a trustee move an older trust into supplemental needs form. Put simply, Florida recognizes these trusts and, after recent updates, gives trustees more room to fix or modernize one.

Three agencies decide how the plan plays out. The Social Security Administration (SSA) runs SSI and reviews the trust against its own rules. Florida's Medicaid program, run through the Agency for Health Care Administration and the Department of Children and Families, handles Medicaid eligibility. The Florida Agency for Persons with Disabilities runs the iBudget waiver that funds many disability services, so a trust coordinated with waiver planning can stretch further.

What that means for your family

Because two systems of law overlap, one slip in either can undo the plan. A trust that is valid under Florida law can still fail the federal resource test if it lacks a payback clause or gives the beneficiary too much control. The reverse happens too. Get both layers right at the start, because fixing a trust after benefits are denied costs more time and money than drafting it correctly the first time.

Your options

Most families choose among four tools, and many use more than one.

• Third-party special needs trust. Funded with someone else's assets, usually a parent's, and it carries no Medicaid payback. It is often set up as part of your special needs estate planning so whatever is left passes to other family members.
• First-party special needs trust. Funded with the disabled person's own money, such as a settlement or inheritance, and it must repay Medicaid at death under 42 U.S.C. section 1396p(d)(4)(A). This is how a first-party trust protects SSI and Medicaid when the money is already in the beneficiary's name.
• Pooled trust. Run by a nonprofit that invests many subaccounts together, authorized under (d)(4)(C). It is the practical choice for smaller amounts or when no suitable individual trustee is available.
• ABLE account. A tax-advantaged account the beneficiary controls directly. It suits everyday spending and beneficiaries who can manage some of their own money, and it works best beside a trust rather than instead of one.

How a special needs trust actually works

Once the trust exists, the day-to-day work falls to the trustee, and this is where plans succeed or fail. The trustee holds the assets, decides what to pay for, and keeps records. The beneficiary cannot demand money or control the account, and the moment they can, through a debit card for instance, the balance can count against them. The mechanics of how a special needs trust is drafted and administered carry more detail than most families expect.

A special needs trust can stand alone as its own document, or it can be built into a revocable living trust alongside the rest of your estate and funded at your death. Which one fits depends on where the money comes from and when.

What a special needs trust can pay for

Because the trust supplements benefits rather than replacing them, the trustee spends on what Medicaid and SSI do not cover, such as therapies, education, transportation, a vehicle, assistive technology, personal-care attendants, travel, and recreation.

How the trustee pays is its own question. Effective September 30, 2024, the SSA stopped counting food as in-kind support and maintenance, so trust-paid groceries and meals no longer reduce an SSI check. Shelter is still treated differently, and paying rent or a mortgage from the trust can lower SSI. The SSA rule that removed food from these calculations spells out the change, but shelter payments still need planning.

Personal service contracts for family caregivers

Some families care for a disabled loved one themselves and want to be paid for it. A personal service contract, also called a family caregiver agreement, is a written agreement that pays a relative or other caregiver to provide that care. Done right, it compensates the caregiver and can turn countable assets into a legitimate expense, which is how families can get paid for taking care of a disabled family member without creating a benefits problem.

The agreement has to satisfy the same Florida Medicaid eligibility rules that govern the rest of the plan. It generally must be in writing and signed before any care is given, describe the services and a fair-market rate, and actually be carried out, and the caregiver must report the pay as taxable income. Handled poorly, paying a family member looks like an uncompensated transfer and triggers a penalty period, so this is drafting to do with an attorney.

Funding the trust with life insurance

Life insurance is one of the more affordable ways to fund a third-party trust, and a second-to-die policy can cover a couple at a lower cost than two single policies. The key is the beneficiary designation. Name the trust, not the child, which is where how life insurance and Medicaid interact makes the difference.

Naming the trust also keeps the death benefit out of probate and out of the beneficiary's own name, so it never touches the resource count on its way in.

Choosing a trustee

The trustee decides how and when money is spent, so the choice matters as much as the document. A family member can serve, and often does while a beneficiary is young, but that person has to know the benefit rules and keep careful records. For a trust that will run for decades or hold real money, many families name a professional or corporate trustee, or pair a relative with one, for steadier administration over the long haul.

ABLE accounts in 2026

An ABLE account lets an eligible person with a disability save in a tax-advantaged account without losing benefits. Beginning January 1, 2026, eligibility reaches anyone whose disability began before age 46, up from the old age-26 cutoff, and up to $100,000 in the account is ignored for SSI. The 2026 contribution limit from all sources is $19,000 a year. That age change opened the door to several million people who were shut out before, many of them adults whose disabilities began later in life.

ABLE accounts suit beneficiaries who can handle some of their own money, and they work best next to a trust rather than in place of one. Mapping out how an ABLE account and a special needs trust work together in Florida is what decides which expenses run through which account.

When your child turns 18

At 18, a child is presumed to be a legal adult who makes their own medical, financial, and personal decisions, even when a disability makes that impractical. Depending on the support your loved one needs, that can mean guardianship, or a lighter arrangement that leaves them more independence.

For many families the lighter route is putting a durable power of attorney and health care surrogate in place before a crisis. These pieces work alongside the trust. One manages the money, the others cover the decisions the money cannot.

Where special needs planning fits

The best time to start is when a disability is first diagnosed or anticipated, because early planning leaves time to pick the right trust, coordinate benefits, and name a trustee before anything is urgent. The same logic that rewards families who plan for Medicaid well before a crisis applies here. Calm decisions made in advance protect far more than decisions forced by an emergency.

Supporting legal details

A few rules carry most of the weight, and each has a practical version.

The first-party rule and the payback

Under 42 U.S.C. section 1396p(d)(4)(A), a first-party trust must be set up for a person under age 65 and must repay the state for Medicaid at death. The law requires the payback clause. For example, a 40-year-old who receives a $200,000 injury settlement can shelter it in a first-party trust, but the state is reimbursed from whatever is left when they pass away.

The Florida definition and a drafting habit

Florida Statutes section 736.04117 treats a supplemental needs trust as one meant to stay outside the resource count. Best practice, rather than a strict legal command, is to write in a tight distribution standard so the trustee never has to hand cash to the beneficiary. For example, the trust pays the dentist directly instead of reimbursing the beneficiary.

Frequently asked questions

Q. Does a special needs trust have to pay back Medicaid?

A. It depends on whose money funded it. A first-party trust, funded with the beneficiary's own assets, must repay the state for Medicaid at death under 42 U.S.C. section 1396p(d)(4)(A). A third-party trust, funded by a parent or grandparent, has no payback and can pass what is left to other relatives.

Q. Will an inheritance cost my child their SSI and Medicaid?

A. It can, and quickly. Countable resources over $2,000 suspend SSI, and Medicaid usually follows. If the money goes into a special needs trust instead of directly to your child, it does not count. The safest step is to make sure wills and beneficiary designations name the trust, not the child.

Q. Who qualifies for an ABLE account now, and how much fits in one?

A. Since January 1, 2026, anyone whose disability began before age 46 can open one. Up to $100,000 is excluded from the SSI resource limit, and total contributions are capped at $19,000 for 2026. The SSA ABLE spotlight page sets out the current rules.

Q. Can the trust pay for my child's groceries?

A. Yes. As of September 30, 2024, the SSA no longer counts food as in-kind support, so trust-paid groceries and meals no longer reduce SSI. Paying rent or a mortgage is still treated as shelter and can lower the SSI check, so those payments need planning.

Q. What should I have ready before meeting a special needs planning attorney?

A. Bring a list of the benefits your loved one receives, any settlement or inheritance details, current wills and trusts, and the beneficiary designations on life insurance and retirement accounts. That lets the attorney see where money is headed and whether it needs to be redirected into a trust.

Serving families across Florida

The firm's main office is in Aventura, where our Aventura special needs planning attorneys work with families across North Miami-Dade.

Throughout Miami-Dade, we handle special needs planning for Miami families in person and by video.

In Broward County, families near Plantation and the rest of Broward can meet at our satellite office or online.

Farther north, we serve Boca Raton and Palm Beach County, with clients statewide by video and phone. Hablamos Espanol.

Take the next step

Getting started is easier than most families expect. Pull together a list of the benefits your loved one receives, any settlement or inheritance on the horizon, and your current wills, trusts, and beneficiary designations, then bring them to a first meeting. A board-certified elder law attorney can see where the money is headed, map which trust fits, and put the funding in place so nothing lands in your child's name by accident.

The result is the thing that matters most. Your loved one keeps the Medicaid and SSI they depend on, and the money you set aside pays for the therapies, care, and everyday comforts those benefits never cover. Elder Needs Law offers a free consultation to families throughout Florida, in person or by video. Contact Elder Needs Law to schedule your consultation.

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Elder Needs Law, PLLC. Responsible attorney Jason Neufeld, Board-Certified Elder Law Attorney. Serving families throughout Florida.

This page is general information about Florida and federal law as of its publication date and is not legal advice. Benefit figures and statutes change, so confirm current rules before acting. No reader should act, or refrain from acting, on this information without first hiring a lawyer licensed in their state to review their particular circumstances.