Special Needs Trusts in Tennessee: Lifelong Care Planning for Adults

Planning for the lifelong care of a loved one with disabilities requires thoughtful preparation. One of the most powerful tools for this purpose is special needs trusts for adults. This legal arrangement safeguards your loved one’s financial future while preserving eligibility for essential government benefits like Supplemental Security Income (SSI) and Medicaid.

At Maryville Estate Planning, we help families design customized special needs trusts that ensure stability, independence, and peace of mind for years to come. In my Tennessee estate planning practice, I focus on third‑party special needs trusts funded with family assets as part of an overall estate plan, and I do not draft first‑party or self‑settled special needs trusts.

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What Is a Special Needs Trust for Adults?

A special needs trust (SNT) for adults manages assets for a person with disabilities without jeopardizing their public assistance benefits. There are several types of SNTs:

• First-party trusts: Funded with assets belonging to the beneficiary
• Third-party trusts: Funded by family members or others
• Pooled trusts: Managed by nonprofit organizations, pooling resources for multiple beneficiaries

Each type allows the individual to maintain quality of life without losing critical benefits.While there are several types of special needs trusts available, my services are limited to third‑party special needs trusts created and funded by parents, grandparents, or other loved ones as part of their estate plan.

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Why a Traditional Inheritance Isn’t Enough

A direct inheritance can unintentionally disqualify someone from benefits because even modest assets count toward eligibility thresholds.

A properly structured SNT shelters these funds, allowing your loved one to access money for approved expenses such as:

• Medical care
• Education
• Transportation
• Recreation
• Therapies and personal enrichment

Lifelong planning requires addressing challenging questions, such as who will cover emergency costs, fund ongoing care, and make decisions on behalf of your loved one. A knowledgeable estate planning attorney can help craft a detailed strategy that balances legal, financial, and personal considerations.

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Benefits of a Special Needs Trust In Tennessee

A special needs trust for adults provides:

• Protection of government benefits: Keeps assets separate from the beneficiary’s personal property
• Controlled use of funds: Directs how and when funds are spent
• Customized care planning: Tailors financial support to the beneficiary’s unique needs
• Continuity and flexibility: Trustees and backup trustees can adjust as circumstances evolve
• Reduced risk of exploitation: Clear documentation prevents misunderstandings and misuse

Tennessee families have an additional option through the pooled trust program administered by Arc Tennessee, a nonprofit organization that manages funds for multiple beneficiaries while preserving benefit eligibility. It is also important to note that Tennessee Medicaid, known as TennCare, has specific rules regarding SNT eligibility that differ from other states. Working with a Tennessee estate planning attorney ensures your trust is structured to meet TennCare requirements and protects your loved one’s benefits long term.

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Common Mistakes to Avoid

Even with good intentions, families may encounter pitfalls without professional guidance:

• Naming the beneficiary directly in a will instead of funding a trust
• Failing to fully fund the trust
• Selecting an unqualified or disinterested trustee
• Using a generic trust that doesn’t reflect the individual’s unique needs
• Not updating the plan as laws, relationships, or care requirements change

When selecting a trustee, look for someone who is organized, trustworthy, and familiar with the beneficiary’s needs and the legal requirements of trust administration. If no suitable family member or friend is available, a professional or corporate trustee is a reliable alternative. This is especially important for long-term trusts where consistent, competent oversight is essential.

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Partner With an Experienced Tennessee Estate Planning Attorney

Creating special needs trusts in Tennessee requires expertise in state and federal benefits, long-term care costs, and family dynamics. At Maryville Estate Planning, we help Tennessee families craft trusts that provide lifelong support and peace of mind.

SCHEDULE YOUR FREE CONSULTATION or call us today at 865.935.9769 to schedule a consultation and start planning a secure future for your loved one.