Special Needs Trust Lawyer in Utah

Protecting a Loved One’s Benefits While Securing Their Future

A direct inheritance or gift to someone receiving Supplemental Security Income (SSI) or Medicaid can push them over the $2,000 individual resource limit and cost them the benefits they depend on. A special needs trust holds those assets separately so they don’t count against the beneficiary’s eligibility. At Pearson Butler, our estate planning attorneys build these trusts as part of a complete estate plan, coordinating the trust with your will, powers of attorney, and any existing living trust rather than treating it as a standalone document.

We’ve served families throughout Utah from offices in South Jordan, Bountiful, and Utah County, handling estate planning alongside probate, tax, and family law since 2010.

Three Types of Special Needs Trusts Used in Utah Planning

Choosing the right trust structure depends on whose assets are funding it and how much administrative involvement your family wants.

Third-Party Special Needs Trusts

Funded with assets belonging to someone other than the beneficiary, most often a parent or grandparent. These trusts aren’t subject to Medicaid payback after the beneficiary’s death, so remaining assets can pass to other family members. This is a common structure for families planning ahead.

First-Party (Self-Settled) Trusts

Funded with the beneficiary’s own assets, such as a personal injury settlement or an inheritance received before a trust was in place. Federal law requires these trusts to include a Medicaid payback provision, reimbursing the state from any remaining balance after the beneficiary’s death.

Pooled Trusts

Managed by a nonprofit organization that combines assets from multiple beneficiaries into a single investment pool while keeping each person’s sub-account separate. Pooled trusts can work well when the trust balance is smaller or when the family wants a third party handling day-to-day administration. A special needs trust can also be structured as a sub-trust within an existing living trust rather than as a separate document.

How a Special Needs Trust Preserves SSI and Medicaid Eligibility

Funds held in a properly structured trust aren’t counted as the beneficiary’s own resources for SSI and Medicaid purposes. Because Utah is an SSI-criteria state, a person approved for SSI must still file a separate Medicaid application with the state rather than being automatically enrolled. Maintaining that eligibility matters, and how the trust is drafted can affect it.

Trust distributions are intended to supplement government benefits, not replace them. Payments are typically made to third parties for goods and services beyond basic food, shelter, and clothing. A well-meaning direct gift or bequest to a disabled beneficiary that bypasses the trust entirely can jeopardize both SSI and Medicaid coverage.

Trustee Responsibilities and Your Options

The trustee is responsible for understanding applicable benefit rules, managing trust assets prudently, keeping accurate records, and making distributions that don’t disqualify the beneficiary. That’s a significant responsibility, and families approach it differently.

• Family trustee: A sibling or other trusted relative who knows the beneficiary personally but must learn the benefit rules
• Professional trustee: A fiduciary who charges an ongoing fee, typically a percentage of assets under management annually, and brings administrative experience
• Co-trustee arrangement: Pairs a family member with a professional trustee or trust protector, combining personal knowledge with administrative oversight

We can help you think through each option and document your choice within the broader estate plan.

Funding the Trust: Life Insurance, Wills, and ABLE Accounts

A trust document alone doesn’t help unless assets actually reach it. Life insurance is frequently used to fund a special needs trust at the grantor’s death, creating a meaningful trust balance even when the rest of the estate is modest. Wills and existing living trusts can also direct assets into the trust rather than passing them outright to the beneficiary.

An ABLE account is a tax-advantaged savings account available to individuals whose disability began before age 46, following the federal ABLE Age Adjustment Act that took effect January 1, 2026. Balances up to $100,000 in an ABLE account aren’t counted as an SSI resource, making it a useful complement to the trust. Families often use the trust for larger long-term assets and the ABLE account for accessible funds covering day-to-day qualified expenses. Because Pearson Butler handles wills, trusts, and broader estate planning under one roof, we coordinate these documents together rather than leaving gaps between them.

Utah Trust Law and DSPD Waiver Timing

Utah recodified its trust statutes into a new Title 75B, effective in 2024, replacing the trust code previously housed in Title 75. Trust documents drafted or reviewed after that date should reflect the updated statutory framework.

Utah’s Division of Services for People with Disabilities (DSPD) administers Medicaid waivers for people with disabilities, and waiting lists for waiver services can run for years depending on the waiver type and available funding. Families are generally encouraged to apply as soon as a person becomes eligible. A special needs trust put in place early can work alongside waiver services once they begin, rather than being established in a rush after a crisis.

Schedule a Special Needs Trust Consultation in Utah

Founded in 2010 by Carson Pearson and Jeff Butler, Pearson Butler brings a team of more than 30 attorneys with over 300 years of combined legal experience to estate planning matters across Utah. Our multi-disciplinary practice means estate planning attorneys work alongside probate, tax, and family law attorneys to address your family’s full picture.