For Lawyers

1.   Are nonprofit trusts given a special status under federal law to trust managers of special needs trusts? Yes.

When Congress confirmed the use of special needs trusts in 1993, the law stated that non-profit organizations may manage special needs trusts, and that non-profit trusts could retain funds in trust even after the death of the first beneficiary. Congress reconfirmed this in 1999.

2.  Does New Hampshire Law protect Disability Trusts from claims? Yes.

New Hampshire law can protect disability (special needs) trusts from most creditor claims, but the level of protection depends on the type of trust and who funded it. New Hampshire recognizes two main categories, each treated differently for creditor claims.

A. Third‑Party Special Needs Trusts (Strongest Protection)

• Funded by someone other than the person with the disability (parents, grandparents, others)

• Governed by RSA 564‑B (New Hampshire Trust Code) and federal SNT law

Creditor protection

• Assets cannot be reached by the beneficiary’s creditors

• Assets are generally not reachable by the beneficiary’s own lawsuits, medical bills, or debts

• No Medicaid payback requirement

Why

• Assets were never owned by the disabled person

• Most SNTs include a spendthrift clause, which NH law enforces

Legal authority

• RSA 564‑B:5‑502 (Spendthrift provisions block creditor access)

• RSA 564‑B:5‑504 (Discretionary trusts further limit creditor reach)

3.  Does New Hampshire have a specific law requiring the State to follow federal law about what special needs trusts can purchase for people with disabilities? ‍ ‍Yes

New Hampshire does have a specific statute that requires the State to follow federal law when determining what special needs trusts (SNTs) may purchase for people with disabilities, particularly for Medicaid eligibility purposes. New Hampshire enacted RSA 167:4, V, commonly called “Emily’s Law,” to explicitly require state compliance with federal SSI and Medicaid rules governing special needs trust distributions. This statute went into effect November 1, 2007.

4.  Is Enhanced Life Options a charitable organization? Yes.

Enhanced Life Options has been determined to be a tax-exempt public charity under IRC 501(c)(3).  

5.  Does the Social Security program allow Special Needs Trusts?Yes.

Since 1975 the Social Security Administration has had established rules allowing assets to be held in trust for a recipient of SSI if the disabled beneficiary cannot control the amount or the frequency of trust distributions and cannot revoke the trust. In 1999 Congress confirmed by statute the use of special needs trusts in the Social Security context.

6.  Does the Medicaid program allow Special Needs Trusts? Yes.

Special Needs Trusts have been used for many years in the Medicaid context, and in 1993 Congress confirmed the use of special needs trusts with respect to Medicaid. In 1996, 2004 and 2007, the New Hampshire Legislature confirmed the use of Special Needs Trusts by State law.

7.  Should I consider a Special Needs Trust if SSI and Medicaid are not involved? Yes.

A Special Needs Trust individually tailored to the needs of a person with disabilities can make a big difference for a person who is not receiving public benefits. Special Needs Trusts provide a protective management service and certain liability protections and can provide supplemental help in the event public benefits are needed in the future.

Contact us

Lakes Region Main Office 55 Church Street Laconia, New Hampshire 03246 Phone: 603-524-4189 Fax: 603-524-5766 Email: elo@elonh.org

Hours 9:00 am - 4:00 pm Monday thru Friday