A Special Needs Trust is established for an individual who receives government benefits, so as not to disqualify the beneficiary from such government benefits. Under ordinary circumstances, when a person is receiving government benefits, an inheritance or receipt of a gift could reduce or eliminate the individual's eligibility for such benefits. By establishing a Trust that provides for luxuries or other benefits that otherwise could not be obtained by the beneficiary, the beneficiary can obtain the benefits from the Trust without defeating his or her eligibility for government benefits. Often a Special Needs Trust includes a event that ends the Trust, in the event that it could be used to make the beneficiary ineligible for government benefits.

The main advantage a special needs trust, in contrast with a direct gift or inheritance, is that, when arranged properly, the assets in the trust do not actually belong to the beneficiary. Because of this, the trust can provide benefits to an individual but not cause the individual who is disabled to be disqualified from government programs.

Special needs trusts usually provide for: 

• Medical expenses
• Dental expenses 
• Eye glasses 
• Annual independent checkups 
• Transportation (and the purchase of transportation) 
• Equipment 
• Training programs 
• Maintenance 
• Education 
• Insurance (including payment of premiums) 
• Rehabilitation 
• Essential dietary needs

Special needs trusts also may allow a trustee to give the beneficiary money for various forms of entertainment, electronic equipment, trips and vacations, computer equipment, athletic training and competitions, companion services and home health aide, and additional items to boost self-esteem.

Finally, a trust can hold cash, stocks, personal property and real property. It can own and be the beneficiary of life insurance. Furthermore, special needs trusts can be used to protect personal injury settlements or judgments from jeopardizing government benefit eligibility. Most importantly, special needs trusts can help parents coordinate their estate plans and provide peace of mind that their child will be provided for.