A supplemental needs trust or often called a special needs trust, is a trust specifically created for people with disabilities.
A third party supplemental needs trust is commonly created by family members to leave people with special needs property or assets, through their estate plan. This allows a person to receive governmental benefits and have these benefits supplemented by the trust. There is not a repayment provision to Medicaid for this type of trust.
A first party special needs trust, unlike a third party trust, is used from the assets of the person with special needs. This allows a person to become eligible for Medicaid and obtain Medicaid rates. Upon the death of the person, the trust will repay Medicaid. The trust must be created for someone under the age of 65.
A supplemental needs trust supplements specific government benefits like Medicaid rather than diminishing such benefits.