Special Needs Trusts for Autism: A Guide

Key Points:

• A special needs trust allows families to set aside funds for a child with autism without jeopardizing government benefits.
• There are different types of special needs trusts, each with unique rules and benefits.
• Proper planning ensures long-term financial security and care for a loved one with autism.

Caring for a child with autism means thinking about both today and tomorrow. Therapy, education, and support services add up, but saving for the future can put vital benefits at risk. A special needs trust provides a solution, allowing parents to plan ahead without sacrificing financial assistance. Here’s what you need to know.

What Is a Special Needs Trust for Autism?

A special needs trust for autism is a legal arrangement that holds and manages funds for an individual with autism without affecting their eligibility for public benefits. Assets in the trust are not counted as personal income, meaning the individual can continue receiving Medicaid, SSI, and other government programs.

Here are the key benefits of a special needs trust:

• Preserves government benefits – Ensures Medicaid and SSI eligibility.
• Provides financial security – Funds can be used for medical, educational, and daily living needs.
• Manages long-term care – Helps ensure lifetime support without financial hardship.
• Protects assets – Keeps money secure and properly allocated.

A special needs trust is one of the best ways to financially protect a loved one with autism while ensuring access to essential services.

What Can a Special Needs Trust Pay For?

A special needs trust can cover a wide range of expenses that improve the beneficiary’s quality of life. However, it cannot be used for direct cash payments to the individual, as this could affect their SSI eligibility. Approved expenses include:

• Medical and dental care not covered by Medicaid.
• Therapies such as ABA therapy, speech therapy, and occupational therapy.
• Education and vocational training to support learning and employment opportunities.
• Housing and living arrangements (if structured properly to maintain benefits).
• Assistive technology and adaptive equipment like communication devices.
• Transportation for medical visits, therapy, and community outings.
• Recreational activities that enhance quality of life.

The trust ensures that the individual has access to additional resources beyond basic government support without financial penalties.

What Are the Various Types of Special Needs Trusts?

Special needs trusts come in three primary forms, each tailored to different financial situations. Choosing the right one depends on your child’s long-term needs. Working with an estate planning attorney can help ensure the trust aligns with your family’s specific goals. Understanding these options is essential for securing your child’s future.

1. First-Party Special Needs Trust

A first-party special needs trust is funded using the beneficiary’s own money, such as an inheritance or a legal settlement. Because the funds originally belonged to the individual, Medicaid requires any remaining money in the trust to be used to repay the cost of services provided during their lifetime.

2. Third-Party Special Needs Trust

A third-party trust is created with funds from parents, relatives, or other loved ones. Unlike first-party trusts, this type does not have a Medicaid payback requirement, allowing any remaining money to be passed to other heirs. It is one of the most popular options for families planning for a child with autism.

3. Pooled Special Needs Trust

A pooled trust is managed by a nonprofit organization and groups together funds from multiple individuals while keeping separate accounts for each beneficiary. This can be a good option for families without a trustee to oversee the funds. If funded with the beneficiary’s own assets, Medicaid payback rules may still apply.

How to Set Up a Special Needs Trust for Autism

Setting up a special needs trust takes careful thought and guidance from legal and financial experts. A well-planned trust ensures that a child with autism has financial support without risking eligibility for government benefits. By following these key steps, you can create a secure and legally sound trust.

1. Determine the Right Trust Type – Decide between a first-party, third-party, or pooled trust based on your child’s financial situation.
2. Choose a Trustee – Select a responsible person or institution to manage the trust funds.
3. Work with an Attorney – An experienced special needs planning attorney ensures the trust meets legal requirements.
4. Fund the Trust – Allocate money, assets, or life insurance policies into the trust.
5. Define Allowable Expenses – Outline what the funds can be used for to protect the beneficiary’s needs.
6. Review and Update the Trust Regularly – Life circumstances change, so ensure the trust is always up to date.

Who Should Manage a Special Needs Trust?

Selecting a trustee is one of the most critical decisions when creating a special needs trust. The trustee is responsible for managing the funds, making distributions, and ensuring compliance with legal requirements. A trustee should be responsible, financially knowledgeable, and familiar with disability benefits to ensure the trust serves its intended purpose.

• Family Members – Parents, siblings, or close relatives who understand the child’s needs.
• Professional Trustees – Attorneys, banks, or financial institutions specializing in trust management.
• Nonprofit Organizations – Many nonprofits offer trustee services for pooled special needs trusts.

How Special Needs Trusts Support ABA Therapy

Applied Behavior Analysis (ABA) therapy is one of the most effective treatments for autism. However, ABA therapy can be expensive, and insurance coverage varies. A special needs trust can cover ABA therapy costs without affecting Medicaid or SSI eligibility.

Many families use trust funds to pay for:

• One-on-one ABA sessions with certified therapists.
• Social skills training to help children interact with peers.
• In-home ABA therapy for personalized support.
• Adaptive learning tools that support behavior modification.

Since ABA therapy is essential for improving communication, social interaction, and daily living skills, using a special needs trust to cover these expenses ensures long-term access to therapy without financial stress.

Secure Your Child’s Future with Early Intervention

Planning for the future is one of the best ways to support a child with autism. A special needs trust provides financial security, while ABA therapy ensures they develop the skills needed to thrive.

At Discovery ABA, we specialize in personalized ABA therapy designed to help children with autism strengthen communication, behavior, and social skills. Our experienced team partners with families to create individualized therapy plans that nurture progress and confidence every step of the way.

We proudly offer ABA therapy in Utah, Virginia, Nevada, North Carolina, New Jersey, Tennessee, Maine, and New Hampshire, bringing quality autism services to families who need compassionate, evidence-based care. If you’re ready to support your child’s growth and independence, contact us today to learn more about our ABA therapy programs.