If you love someone with a disability, you have probably asked yourself who will look after them when you no longer can. A special needs trust in Missouri and Kansas is one of the main tools families use to answer the money side of that question. Set up with care, it lets you leave an inheritance that adds to your loved one’s quality of life instead of putting their benefits at risk.

Here is what families on both sides of the state line should know about the third-party special needs trust, the kind you create with your own money.

Why can an inheritance hurt someone on SSI or Medicaid?

Supplemental Security Income (SSI) and the Medicaid programs that serve many people with disabilities are need-based, so they look at what a person owns. The SSI limit on countable resources is $2,000 for an individual. Kansas generally uses the same $2,000 figure for one person in its elderly and disabled medical programs. In Missouri, MO HealthNet lists a resource limit of $6,220.50 for an individual in its aged, blind and disabled programs as of July 2026.

Those limits are low. A check from a parent’s estate, a life insurance payout, or a share of the family home can push your loved one over the line. Benefits may stop until the money is spent down, and the inheritance you meant to last for years may be gone quickly. We cover this problem in more detail in our article on inheritance and Medicaid.

What is a third-party special needs trust?

A special needs trust, also called a supplemental needs trust, holds money for a person with a disability. A trustee you choose manages the money and spends it for that person’s benefit. There are two main kinds:

• First-party trust. This holds the person’s own money, such as a legal settlement or an inheritance already received. Federal Medicaid law generally requires that the person be under 65 and disabled, and that the state be repaid from what remains at death, up to the amount Medicaid paid. Pooled trusts run by nonprofits are a related option with their own rules.
• Third-party trust. This holds money from someone else, usually a parent or grandparent. Because the money never belonged to your loved one, that Medicaid payback requirement does not apply, and you decide who receives what is left.

You can build a third-party trust into a will or a living trust, or create it as a separate document. A trust inside a will does not exist until the will goes through probate. A separate trust can be ready now, so grandparents and other relatives can name it in their own plans instead of leaving money directly to your loved one. Planning for a spouse with a disability follows different rules, so raise that situation with your attorney.

How is a special needs trust in Missouri and Kansas treated?

For SSI, Social Security asks whether the beneficiary can end the trust and take the money, or direct the principal toward their own support. If they cannot, the trust generally is not a resource. The wording of the document matters a great deal.

Kansas law is especially specific. Under K.S.A. 39-709, a discretionary trust counts as an available resource for medical assistance unless two things are true. The trust must state a clear intent that it is supplemental to public assistance. It must also be funded by someone who owed the beneficiary no duty of support when the money went in, or only nominally by someone who did. Parents should ask how that second rule applies to them, especially if their child is a minor.

Missouri‘s trust code says a beneficiary’s interest in a discretionary trust is not a property interest or an enforceable right, and it limits what creditors can reach. MO HealthNet reviews trusts when deciding eligibility, so the document should be written with that review in mind. Missouri also created the Missouri Family Trust, also known as the Midwest Special Needs Trust, by statute. It can be worth a look for families who do not have a trustee in mind.

What can a supplemental needs trust pay for?

The trust is meant to add to benefits, not replace them. Payments made directly to providers for things like these generally work well:

• Therapies and care that benefits do not cover
• Education, tutoring and job training
• Transportation
• Hobbies, outings, and trips to see family

Trustees do need to be careful. Under Social Security’s trust rules, cash handed directly to the beneficiary counts as income and can reduce an SSI check. Paying for housing can reduce it as well. Sometimes a smaller check is a fair trade for a better home, but the trustee should know the effect before writing the check. That is one reason choosing the right trustee matters so much. Your trustee should be organized, keep good records, and be willing to ask questions first.

Is an ABLE account a better choice?

Often the answer is both. An ABLE account lets a person with a disability save and spend with more day-to-day independence. Starting January 1, 2026, the age of disability onset rose from before 26 to before 46, so more people qualify. ABLE accounts have yearly contribution limits, though, while a trust can hold larger sums and can receive an inheritance. Our guide to ABLE accounts in Missouri and Kansas explains how the state programs work.

Common mistakes when planning for a loved one with a disability

• Naming your loved one directly. Life insurance, retirement accounts and payable-on-death accounts pass by beneficiary designation, not your will. Check each one.
• Leaving it all to a sibling. A sibling who promises to help has no legal duty to do so, and that money can be exposed to the sibling’s divorce, debts or death.
• Using a generic trust. A trust that requires payments, or lets your loved one demand money, can be counted against them.
• Forgetting the relatives. A well-meant gift from a grandparent can cause the same problem as your own. Tell family that the trust exists.
• Overlooking retirement accounts. Naming a trust as beneficiary of a retirement account raises its own tax rules, so the trust should be written with that in mind.

Talk with The Binder Firm about your family’s plan

Every family and every benefit program is different, and the rules change. The Binder Firm helps Missouri and Kansas families plan for loved ones with disabilities. Call us at 816-866-8264 to talk through your situation.

This article provides general information and is not legal advice. Reading it does not create an attorney-client relationship.