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 Tennessee, 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. These trusts are designed to provide funds for expenses that enhance the beneficiary's quality of life while not disqualifying them from programs like Social Security, Supplemental Security Income (SSI), Medicare, or Medicaid. The trust's assets can be used for a variety of life-enhancing expenditures such as education, medical and dental expenses, personal care attendants, and recreational activities, but not for basic needs covered by government benefits. Tennessee follows the federal guidelines for special needs trusts, which require that the trust be irrevocable, established for the benefit of an individual under 65 years of age, and that it be created by a parent, grandparent, legal guardian, or a court. Upon the beneficiary's death, any remaining funds in the trust may be claimed by the state to reimburse for the cost of care provided through Medicaid.