A special needs trust—also known as a supplemental needs trust—is an irrevocable trust designed to provide supplemental income for a designated beneficiary who is physically disabled, mentally disabled, has chronic illness, or has other special needs and is receiving or may be eligible to receive government benefits—such as Social Security, Supplemental Security Income (SSI), Medicare, or Medicaid.

A special needs trust is often created by parents of a disabled child, with the trust prohibiting distributions from being used for the child’s food, clothing, or shelter to ensure the child (or adult) remains eligible for related government benefits. A special needs trust must be created before the beneficiary reaches the age of 65.

In Alabama, a special needs trust, also known as a supplemental needs trust, is a legal arrangement that allows individuals with disabilities to receive financial support without jeopardizing their eligibility for government assistance programs like Social Security, Supplemental Security Income (SSI), Medicare, or Medicaid. These trusts are typically established by parents or guardians for the benefit of a disabled child or adult, and they are designed to provide for the extra and supplemental needs of the beneficiary, beyond what government programs cover. The trust's assets cannot be used for basic support items such as food, clothing, or shelter, as this could disqualify the beneficiary from receiving government benefits. Alabama follows the federal guidelines for special needs trusts, which require that the trust be established before the beneficiary turns 65 years old. It is important to consult with an attorney who specializes in special needs planning to ensure that the trust is properly set up and administered in accordance with both state and federal laws.