Attorney at Law
Families who care for loved ones with disabilities often depend on special needs trusts (SNTs) to preserve eligibility for crucial government benefits while also providing supplemental financial support. These trusts remain cornerstones of disability and estate planning, but both federal policy and Florida law are evolving. At Tupper Law, P.A., we help Jacksonville families keep their plans current and compliant. Below is what you (and your clients) need to understand now.
What Is a Special Needs Trust?
A special needs trust is a trust vehicle designed to hold assets for the benefit of a person with disabilities, without causing disqualification from means-tested government programs. Properly structured, it allows the beneficiary to receive “supplemental” benefits, things like education, therapy, assistive technology, or recreation, while preserving access to:
- Supplemental Security Income (SSI)
- Medicaid
- Housing assistance, Food Assistance, and other state or federal aid
The key is that the trust must be drafted and administered in strict compliance with both federal and Florida rules so that the assets in the trust are not counted as resources against benefit eligibility.
Recent Federal & Florida Developments You Must Know
Here are the most significant recent changes impacting special needs trust planning in Florida as of 2025:
Removal of “Food” from In-Kind Support & Maintenance (ISM)
One of the more significant fiduciary reliefs occurred at the federal/SSA level: food is no longer considered under the definition of “in-kind support and maintenance” (ISM) for SSI purposes.
What this means for SNTs in Florida:
Trustees may now use trust funds to cover groceries, restaurant meals, or food for outings without risking an SSI reduction.
- Caveat: Shelter (rent, mortgage, utilities, etc.) remains part of ISM and may still affect SSI. Be attentive to SSA/Medicaid practice in Florida, as state-level applications or procedural interpretations may lag behind the change.
Florida’s 2025 Trust Law Reform: SB 262 (effective June 20, 2025)
Florida recently enacted broad changes to its trust statutes via Senate Bill 262, which amends Chapter 736, Florida Statutes. Some of these changes are especially relevant to SNT planning and administration.
While SB 262 is not SNT-specific, its expanded flexibility and clarified trustee powers can benefit well-drafted special needs trusts. Especially when adapting or modernizing an existing trust.
SSA/Medicaid Pooled Trust Rules & Policy Updates
A pooled trust is a trust run by a nonprofit where each beneficiary has a separate subaccount, but funds are pooled for investment/administration. Under federal Medicaid law (42 U.S.C. § 1396p(d)(4)(C)), states must allow a “pooled trust” option. Florida is no exception. Due to the food/ISM change, trustees of pooled SNTs in Florida (and nationwide) will have more flexibility to cover groceries or meals without triggering adverse SSI consequences.
What These Changes Mean for Jacksonville Families
- Greater flexibility and modernization: Thanks to SB 262, trustees have broader authority to modify, decant, or restructure trust arrangements (as permitted under the trust document) in a way that may better adapt to a beneficiary’s evolving needs.
- Food payments simplified: The removal of food from ISM reduces a longstanding administrative headache and allows trustees to use funds more freely for nourishment.
- Opportunity to revisit legacy trusts: Because SB 262’s changes apply retroactively, you may have more tools now for modernizing older trusts (e.g., decanting into supplemental needs formats) than before.
- Watch out for state/agency lag: Florida’s Medicaid or SSA offices may take time to adapt to federal/SSA changes, so trust administration must remain very careful.
Strategic Considerations When Updating Your Plan
If you or your client already has a special needs trust (or is planning one), here are key triggers and questions for review:
Does the trust comply with the current federal/Florida rules?
- Does it include the necessary language for Medicaid payback (if first-party)?
- Does it properly exclude distributions from counting as resources?
- Does it avoid consequences for unpermitted in-kind support?
Should the trust structure be modernized?
- Can decanting under SB 262 improve flexibility, fees, or investment options?
- Would converting or merging into a supplemental needs trust or pooled trust enhance outcomes?
- Would using a hybrid structure or a “seed” trust (beneficiary establishes later) make sense?
Is the trustee’s authority and oversight robust?
- Does the trust document allow decanting or restructuring?
- Does it require sufficient reporting, accounting, or fiduciary checks?
- Should you consider successor trustee provisions or limitations in light of SB 262 changes?
Should you join or switch to a pooled trust?
- Compare fees, administrative oversight, and flexibility.
- Ensure the pooled trust is structured correctly and meets SSA/Medicaid qualification requirements.
Monitor future SSA/POMS changes and state rules.
- Although “food” is now excluded from ISM, future shifts may still impact other categories.
- Stay attuned to SSA/Medicaid guidance on how Florida applies those changes.
Protecting the Future Starts with Today’s Decisions
Special needs trust planning isn’t just about preserving benefits; it’s about peace of mind for the entire family. With recent updates to both federal rules and Florida’s trust laws, the best time to revisit your plan is now.
At Tupper Law, P.A., we’ll walk you through your options and craft a trust that truly fits your loved one’s needs. Contact us today to schedule a consultation and learn how updated planning can secure a brighter future for your loved one.