Evaluating homeownership in a First-Party Special Needs Trust
One of the most rewarding parts of serving as trustee is helping beneficiaries achieve goals that improve their quality of life. Sometimes those goals involve therapies, caregiving support, transportation, or education. Other times, they begin with something more fundamental: finding a home that genuinely meets the beneficiary’s needs.
Recently, we had the opportunity to work with a family who owned a two story home and had a young son living with disabilities. Daily activities such as bathing and bedtime required parents and caregivers to carry the child up and down the stairs several times each day. Although the family provided exceptional care, the home’s design created ongoing challenges and safety concerns.
When Northwest Trustee became trustee of the beneficiary’s First-Party Special Needs Trust (SNT), one of our first conversations focused on housing. The family wasn’t looking for a larger or more elaborate home. They simply needed a home that better supported the beneficiary’s mobility, care needs, safety, and long-term well-being.
After evaluating the beneficiary’s circumstances, the trust’s resources, and anticipated future needs, the trust purchased a single-story home. The impact extended far beyond the real estate transaction itself. By eliminating the need to navigate stairs, daily routines became safer and more manageable, reducing the physical demands on caregivers while providing
the beneficiary with greater accessibility, comfort, and mobility.
Stories like this illustrate why homeownership can be one of the most meaningful uses of trust assets.
The Advantages of Homeownership
For many individuals living with disabilities, finding appropriate housing can be challenging. While some beneficiaries may qualify for needs-based housing programs such as Section 8, waitlists can stretch for years. Even when housing becomes available, it may not adequately accommodate physical, cognitive, developmental, or sensory disabilities.
A trust-owned home can provide flexibility to meet a beneficiary’s unique needs. Modifications such as wheelchair ramps, widened doorways, roll-in showers or wet rooms, ceiling track lift systems, smart-home technology, dedicated therapy spaces, sensory-friendly environments, therapeutic swim spas, and other safety enhancements can significantly improve a beneficiary’s ability to live independently and comfortably. In many cases, these modifications are difficult or impossible to implement in a rental setting.
For some beneficiaries, a home with a yard may provide space for therapeutic recreation, exercise, sensory experiences, or outdoor activities.
Home ownership can also provide long-term stability. Beneficiaries are not exposed to unexpected rent increases, landlord decisions, property sales, or the loss of accessible housing. For individuals living with disabilities, remaining in a familiar environment can provide tremendous benefits.
Perhaps most importantly, having a place to call home can foster independence, personal pride, and a greater sense of control over daily life. These quality-of-life considerations are often central to the purpose of a Special Needs Trust.
Understanding Public Benefit Considerations
One of the questions families often ask is, “How might homeownership affect SSI and/or Medicaid eligibility?”
A beneficiary’s primary residence is generally an exempt asset for SSI and Medicaid purposes. However, when a trust pays shelter expenses such as mortgage costs, property taxes, insurance, or utilities, SSI rules regarding In-Kind Support and Maintenance (ISM) may apply. In most cases, SSI benefits are reduced rather than eliminated.
For example, a beneficiary living in a trust owned home that pays shelter expenses may experience a reduction of a few hundred dollars while receiving housing support worth several thousand dollars per month. The purpose of a Special Needs Trust is not simply to preserve benefits at all costs. Rather, it is to determine whether the overall benefit to the beneficiary justifies any potential reduction in public outcome.
Important Considerations
While homeownership can be transformative, trustees must also consider the impact of benefits rules, other family members living in the home, and the long term sustainability of a home purchase.
Because a First-Party Special Needs Trust must be administered solely for the benefit of the beneficiary, trustees must carefully evaluate situations where family members, caregivers, or others may also live in the home. Occupancy agreements may be used to clarify expectations regarding the use of the property and the sharing of household expenses.
Trustees must also evaluate ongoing costs including property taxes, insurance, maintenance, repairs, and future accessibility modifications. Just as important is planning for the future. A home that meets a beneficiary’s needs today may not be the right fit years later as needs or conditions change.
Families should also understand that First-Party Special Needs Trusts generally contain a Medicaid “payback” provision, meaning that after the beneficiary’s passing, any remaining trust assets, including the home, may need to be paid back to Medicaid up to the cost of services the beneficiary received during their lifetime.
The Value of an Experienced Trustee
At Northwest Trustee, we recognize that housing decisions impact far more than where a beneficiary lives. As trustee, we work with beneficiaries, families, attorneys, care managers, and real estate professionals to evaluate housing needs, benefit eligibility, affordability, accessibility, and the trust’s long-term sustainability. Because every situation is unique, we develop tailored solutions that balance quality of life with responsible stewardship. Whether through homeownership, renting, or another arrangement, our goal is to promote stability, independence, and security while supporting both current and future needs.
by Allison Ferris, JD, CTFA
Chief Fiduciary Officer
Published Fall 2026