After advocates criticized the Social Security Administration (SSA) for refusing to allow court-established Special Needs Trust to qualify as exempt resources for Supplemental Security Income (SSI) purposes, the SSA has issued an Administrative Message, AM-15032, clarifying its policy regarding these trusts.

The Administrative Message explains that the rejection of court-established Special Needs Trust is appropriate ONLY when the trust was finalized prior to the court’s action.  If the trust is established after the court issues an order establishing the trust, the Special Needs Trust should be accepted by SSA. The message states that

The resource counting provisions of [the SSI rules] do not apply to a trust:

  • which contains the assets of an individual under age 65 and who is disabled; and
  • which is established for the benefit of such individual through the actions of a parent, grandparent, legal guardian or a court; and
  • which provides that the State(s) will receive all amounts remaining in the trust upon the death of the individual up to an amount equal to the total medical assistance paid on behalf of the individual under a State Medicaid plan… The special needs trust exception does not apply to a trust established through the actions of the disabled individual himself or herself.

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In the case of a special needs trust established through the actions of a court, the creation of the trust must be required by a court order for the exception in [the SSI rules] to apply. That is the special needs trust exception can be met when courts approve petitions and establish trusts by court order, so long as the creation of the trust has not been completed before, the order is issued by the court. Court approval of an already created special needs trust is not sufficient for the trust to qualify for the exception. The court must specifically either establish the trust or order the establishment of the trust. … In addition, the reevaluation of previously excepted trusts during post-eligibility (PE) events is not necessary unless there is an amendment to the trust or a clarification or change in policy that may affect the trust resource determination”

AM-15032, SSA’s Administrative Message clarifying the SSA’s treatment of court-established Special Needs Trust, is attached here –  SSA Administrative Message-15032

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