Susan Cho came to see me on a Wednesday morning in February. She and her husband David, who lives in Plano and works in the tech corridor along Legacy Drive, had been referred by a client. She had a document in her hand: the will of David's mother, who had died three weeks earlier.
"She left $85,000 to our son Michael," Susan said. "She wanted to make sure he was taken care of."
Michael is twenty-two. He has autism. He receives Supplemental Security Income — about $943 a month — and he is enrolled in Texas Medicaid, which covers his therapies, his medications, and the supported employment program through which he holds a part-time job at a grocery store in Plano.
David's mother had loved Michael. She had visited him every Sunday for twenty-two years. She had meant every word of that inheritance. She had also — through no fault of her own — just handed Michael a problem that had to be solved in thirty days or he would lose everything she had given him, along with benefits he could not easily replace.
The SSI resource limit is $2,000. The moment Michael received his grandmother's inheritance, his countable resources would exceed that limit by $83,000. Texas Medicaid eligibility is linked to SSI eligibility in Michael's case. If Michael lost SSI, he lost Medicaid. Thirty days to spend down, transfer to a qualifying trust, or watch the benefits disappear.
I am an estate planning attorney. I have been practicing in Texas since 1986. I hold a Master of Laws in Taxation from New York University School of Law. I have drafted hundreds of special needs trusts over three decades. I am also the mother of a twenty-two-year-old son with Down syndrome and autism. When Susan sat across from me with that will, I understood exactly what the next thirty days were going to look like — and I understood it the way you can only understand something when it has also been your own life.
The Problem With Well-Meaning Inheritance
David's mother did not make a planning mistake out of carelessness. She made it because almost no one had told her that "leaving money to Michael" and "providing for Michael" are two entirely different legal acts when Michael receives SSI and Medicaid.
Under federal law, SSI is available to disabled individuals with countable resources below $2,000. The definition of countable resources, set out in 20 C.F.R. § 416.1201, includes cash, bank accounts, real property not used as a primary residence, and most other assets the recipient could convert to cash. An inheritance lands in that category on the day it is received. The Social Security Administration gives an SSI recipient thirty days to reduce excess resources before terminating the benefit.
For the Cho family, the math was brutal. David's mother left $85,000. Michael's resource limit is $2,000. He had $83,000 to either spend down on allowable items or move into a qualifying trust — or watch the SSI stop. When SSI stops, Texas Medicaid follows, because Michael's Medicaid eligibility flows through his SSI status. The supported employment program. The medications. The therapies. All of it dependent on Medicaid. All of it at risk because a grandmother who loved her grandson did not have a special needs attorney review her estate plan before she died.
I have described the SSI resource trap and its mechanics in more detail in The $2,000 Trap: What Every Texas Family with a Disabled Loved One Must Know. What I want to focus on here is something different: what families in McKinney, Plano, and Collin County need to know about choosing the right structure before the emergency arrives — and what has changed in the past year that makes SNT planning more powerful than it has ever been.
Third-Party Trusts vs. First-Party Trusts: The Distinction That Determines Everything
There are two kinds of special needs trusts, and the difference between them determines who pays back the government when the beneficiary dies.
A third-party special needs trust is funded with assets that have never belonged to the disabled beneficiary — money from grandparents, parents, siblings, or other family members. Because the assets were never the beneficiary's property, there is no Medicaid payback requirement when the beneficiary dies. Whatever remains in the trust at death passes to whoever the trust document names as next beneficiaries: other children, grandchildren, a charity, or whomever the grantor chose. This is the trust that David's mother should have established in her own estate plan — a testamentary special needs trust funded at her death, without any of the crisis mechanics.
A first-party special needs trust — also called a (d)(4)(A) trust, after 42 U.S.C. § 1396p(d)(4)(A) — is funded with assets that belong to the disabled beneficiary themselves: a personal injury settlement, an inheritance already received, Social Security backpay. When the beneficiary dies, the state of Texas is entitled to reimbursement from the remaining trust assets for Medicaid benefits paid during the beneficiary's lifetime. The payback comes first, before any distribution to family.
When Susan walked in with that will, Michael's only option was a first-party trust. The money was coming to him. We drafted the trust, worked through the Social Security Administration's documentation requirements, funded it, and established it before the thirty-day window closed. The SSI and Medicaid stayed intact. But the Medicaid payback provision came with it — when Michael eventually dies, the state will have first claim on whatever remains.
If David's mother had seen a special needs attorney before she died, the story would be different. Her estate plan would have directed Michael's bequest into a third-party SNT she created for his benefit. No payback. No thirty-day emergency. Whatever remained at Michael's death going to whoever she chose. That plan is available to every family in Collin County right now — while there is still time to build it without a crisis driving the calendar.
What Changed in 2024: The Rule About Food and Housing
One of the most persistent misconceptions about special needs trusts — one I still hear from attorneys and from families who have read outdated resources online — is that the trust cannot pay for food or housing without reducing the beneficiary's SSI check.
That was true. As of September 30, 2024, it is no longer true.
The Social Security Administration's Final Rule, effective September 30, 2024, eliminated what was known as the In-Kind Support and Maintenance (ISM) rule. Under the old rule, if a trust paid for food or shelter, the SSA reduced the beneficiary's monthly SSI payment — in some cases by as much as one-third of the federal benefit rate. A trust that paid Michael's rent would have reduced his SSI by roughly $314 a month. That reduction applied even when Michael had no other income, meaning every dollar the trust spent on housing cost him a corresponding reduction in the government benefit the housing was supposed to supplement.
Under the current rule — which applies to all SSI recipients — neither food nor shelter provided by a third party, including a special needs trust, reduces the SSI payment. A trust can now pay for groceries, rent, utilities, internet, and other household costs without any corresponding reduction in the monthly benefit. This is a significant expansion of what a properly structured SNT can accomplish for beneficiaries in McKinney, Plano, Allen, and the rest of Collin County — and families who built their plans before September 2024 may want to revisit how their trustee is making distributions.
What to Look for in a Special Needs Trust Attorney in McKinney or Plano
Questions about estate planning? A WG Law attorney can walk you through your options.
Collin County has grown substantially over the past decade, and with it the number of estate planning attorneys practicing in the area. Not all of them have meaningful experience at the intersection of SSI rules, Medicaid eligibility, Texas trust law, and disability planning. A will drafted by an attorney who doesn't understand the SSI resource exclusion requirements can inadvertently destroy a beneficiary's benefits even when the intent is to protect them.
When evaluating an attorney for a special needs trust in McKinney or the surrounding area, ask three questions.
Do they know the current SSI and Medicaid rules — not the rules from five or ten years ago? Special needs trusts are governed by a combination of federal SSI regulations (20 C.F.R. Part 416), Medicaid rules (42 U.S.C. § 1396p), and state trust law (Texas Property Code § 142.005 and the Texas Trust Code, Chapters 111–115). The ISM rule changed in September 2024. ABLE account contribution limits and SSI interaction rules change periodically. An attorney who hasn't drafted these trusts regularly may not know what changed, and may draft provisions that were sound in 2018 but are now either too restrictive or inadvertently disqualifying.
Do they understand the tax treatment of the trust? A special needs trust is typically a complex trust for federal income tax purposes. The trust document must be drafted so that trust income and distributions do not create unintended tax consequences for the beneficiary or the trustee. Trusts that accumulate income are taxed at compressed rates — reaching the 37% federal bracket at just over $15,000 of income in 2025. A properly drafted trust includes distribution provisions designed to reduce this exposure. This is where my LL.M. in Taxation from NYU matters in practice: I have handled the tax side of special needs trusts for more than thirty years, not just the benefits-preservation side.
Do they understand local practice? Court-created special needs trusts — required when the disabled person is a minor or lacks the legal capacity to sign — go through the Collin County Probate Court. Knowing the local practice, the documentation requirements, and the timeline matters when you are working against a thirty-day window or trying to coordinate a trust with an upcoming probate proceeding in McKinney.
The Letter of Intent: What No Document Can Fully Capture
The special needs trust handles the legal and financial architecture of your child's future. But the document that matters most to most parents is often the one no attorney drafts: the letter of intent.
A letter of intent is a private, non-binding document that describes your child to the person who will care for them when you are gone — the foods they love and hate, the sensory sensitivities that can derail a day, the therapists and doctors who know them best, the routines that make their world stable, the communication systems they rely on. It cannot be enforced in court. It is not a legal document. But the trustee or guardian who steps into your role after your death will need exactly this information to provide care that fits the person, not just the diagnosis.
I wrote one for my son Christian before I knew what it was called. I have helped dozens of families write them since. If you have not started one yet, it is often the right place to begin — before the trust, before the will, before any legal document at all. The process of writing it clarifies what you actually want the trust to accomplish.
The ABLE Account: What Works Alongside the SNT
A special needs trust is not always the only tool, and it is not always the right first tool. ABLE accounts — established under IRC § 529A — allow individuals whose disability began before age 26 to save up to $18,000 per year (the 2025 limit) in a tax-advantaged account that does not count against SSI resources up to $100,000. Funds in an ABLE account can be used for a broad range of disability-related expenses with no trust administration formalities, no trustee decisions, and no distribution paperwork.
The right structure for most families combines both: a special needs trust for larger assets (bequests from parents and grandparents, life insurance proceeds, settlements) and an ABLE account for more flexible day-to-day supplemental spending. I wrote about the comparison in detail in ABLE vs. SNT: The One-Chart Answer After 22 Years as a Special-Needs Mom. The short version: they solve different problems, and they work well together.
What I Learned Writing My Son's Trust
Christian is twenty-two. He has Down syndrome and autism. He has a job. He has strong opinions about pizza toppings that he has held consistently since the age of seven. He has loved the same children's show since he was four years old and has shown no indication that he intends to move on from it.
Writing his trust was technically straightforward. I had drafted hundreds of them. I knew every provision, every SSI exclusion requirement, every distribution standard. What I had not anticipated was how long I would sit with the finished document before I signed it — because a special needs trust for your own child is also a plan for a world in which you are not in it. It is a legal acknowledgment that someone else will take over, and that the best you can do is make the instructions clear enough that the person who comes after you can find their way.
Christian's trust is now part of a broader structure that includes a guardianship arrangement, a detailed letter of intent, and an ABLE account for supplemental spending. It took years to build and it is never fully done — I update it when Texas law changes, when the SSI contribution limits shift, and when Christian's life changes in ways that affect what he needs.
What I know — as an attorney and as a parent — is that the families who plan early have options the families who plan in emergencies do not. David's mother, had she seen me first, would have written a testamentary special needs trust for Michael in her estate plan. Michael's benefits would have stayed intact without a thirty-day scramble. And the money she left him would eventually have passed to his family without a Medicaid payback claim eating into it first.
That plan is available to you now — while there is still time to build it without an emergency driving the timeline. WG Law serves families with special needs trust planning across McKinney, Plano, Allen, Prosper, Frisco, and the broader Collin County area. If your family includes a child, sibling, or other loved one with a disability — or if you are a grandparent who wants to provide for a grandchild without putting their benefits at risk — call 214-250-4407 or request a consultation to speak with our team.
We don't do this work at a remove. We do it from the inside.
This article provides general information about special needs trusts and is not legal advice. Special needs planning involves individualized legal, tax, and benefits analysis. The SSI resource limits, ISM rule change, and ABLE contribution limits described reflect federal law and SSA guidance in effect for 2024–2025; consult a qualified attorney for advice specific to your situation and your family member's benefit programs.