Nevada Special Needs Trust: How It Works and When You Need One

What a Special Needs Trust Does in Nevada

A special needs trust (SNT) lets a person with a disability hold assets without losing eligibility for means-tested benefits like Supplemental Security Income (SSI) and Medicaid. The trust owns the assets instead of the individual, so they don't count against SSI's resource limits.

This matters in Nevada because many adult services — including the HCBS Intellectual Disabilities Waiver managed by the Aging and Disability Services Division (ADSD) — require Medicaid eligibility. A direct inheritance or lawsuit settlement deposited into the beneficiary's bank account can immediately disqualify them.

There are two main types of special needs trusts, and which one your family needs depends on where the money comes from.

First-Party (Self-Settled) Trusts

A first-party SNT holds assets that belong to the person with a disability — typically from a personal injury settlement, an inheritance received directly, or back-pay from a benefits award. Under 42 U.S.C. § 1396p(d)(4)(A), the trust must be:

• Established by the individual, a parent, grandparent, legal guardian, or court
• For the sole benefit of an individual under age 65 who is disabled
• Irrevocable

The catch: when the beneficiary dies, the state of Nevada gets reimbursed from the remaining trust assets for Medicaid benefits paid during their lifetime. This "payback provision" is the trade-off for preserving benefit eligibility during the beneficiary's life.

Pooled trusts under 42 U.S.C. § 1396p(d)(4)(C) are an alternative for individuals with disabilities who want nonprofit management or do not have a family member to serve as trustee. A nonprofit organization manages the pooled fund, maintaining separate sub-accounts for each beneficiary. Nevada has a limited number of pooled trust programs available.

Third-Party Trusts

A third-party SNT is funded entirely by someone other than the beneficiary — usually parents, grandparents, or other family members. This is the type most families set up as part of estate planning.

The key advantage: no Medicaid payback requirement. When the beneficiary dies, remaining trust assets pass to other family members or beneficiaries the trust creator designated. Third-party trusts can be established during the creator's lifetime or through their will.

This is particularly relevant for Nevada families navigating the turning-18 transition. If you're leaving assets to a child with a disability, they should flow through a third-party special needs trust — never directly to the individual.

When You Need a Trust vs. When You Don't

Not every family needs a special needs trust. If your adult child's only income is SSI ($994/month for an individual in 2026) and their only financial management need is ensuring those benefits are spent appropriately, a Representative Payee designation through the Social Security Administration handles that without any legal fees.

Similarly, ABLE accounts let individuals with disabilities save up to $20,000 per year (2026 limit) without affecting SSI or Medicaid eligibility, with the first $100,000 in the account completely excluded from SSI resource counting. For many families, an ABLE account provides sufficient asset protection without the cost and complexity of establishing a trust.

A special needs trust becomes necessary when:

• The individual receives or will receive a lump sum (inheritance, settlement, back-pay) that exceeds what an ABLE account can absorb
• The family's estate plan includes significant assets that will eventually pass to the individual
• The individual owns or will own real property

The Cost Question

Setting up a special needs trust in Nevada typically requires a special needs planning attorney. Expect to pay $2,500 to $5,000 for a straightforward third-party trust, and potentially more for a first-party trust that requires court approval.

If you're in the early stages of turning-18 transition planning and haven't yet determined which legal structures your family needs, our Nevada Adult Guardianship & Alternatives Guide helps you evaluate all the options — from supported decision-making and powers of attorney through guardianship and financial planning tools like ABLE accounts and trusts — so you can make informed decisions before spending on professional services.

See more Nevada guides →