A Comprehensive Legal Summary | Updated June 2026
Introduction and Definition
A Special Needs Trust (SNT) is a trust designed to hold assets on behalf of a person with a disability without those assets being counted as available resources for means-tested public benefit programs such as New Hampshire Medicaid (administered by the New Hampshire Department of Health and Human Services, DHHS) and federal Supplemental Security Income (SSI). A properly structured SNT allows the beneficiary to receive supplemental support — dental and vision care not covered by Medicaid, assistive technology, additional personal care beyond waiver-funded hours, transportation, education, recreation, and personal enrichment — without jeopardizing the government health coverage and income support that underpin long-term care for people with severe disabilities.
New Hampshire special needs trust law is grounded in the New Hampshire Trust Code, codified at RSA Chapter 564-B. New Hampshire adopted this code based on the framework of the Uniform Trust Code, providing a comprehensive and predictable statutory structure for trust creation, administration, modification, and trustee duties. New Hampshire DHHS’s Medical Assistance Manual (MAM) Section 411 specifically addresses the Medicaid treatment of special needs trusts and requires that all trusts be forwarded to the DHHS State Office for a trust review to determine whether the trust constitutes a countable resource or whether any disbursements would be treated as countable income. All New Hampshire SNTs must also comply with federal Medicaid law under 42 U.S.C. § 1396p(d)(4) and SSA policy governing the SSI program.
New Hampshire offers a relatively straightforward SNT planning environment in several respects. New Hampshire does not require a Qualified Income Trust (Miller Trust) even for long-term care Medicaid applicants with high income — the state uses a spend-down pathway rather than a formal income diversion instrument. New Hampshire also has no state income tax as of 2025, when its Interest and Dividends Tax was fully eliminated, simplifying the tax administration of SNT assets. New Hampshire’s CFI (Choices for Independence) Waiver is the state’s primary HCBS waiver program and provides broad community-based services as an alternative to nursing facility placement. The NH ABLE Plan provides tax-advantaged savings for eligible New Hampshire residents, though without a state tax deduction given the absence of a state income tax.
Types of Special Needs Trusts
New Hampshire recognizes three primary types of special needs trusts under state and federal law:
First-Party (Self-Settled) Special Needs Trusts
A first-party SNT is funded with assets belonging to the person with the disability — most commonly proceeds from a personal injury settlement, a direct inheritance, or savings that would otherwise disqualify the individual from Medicaid or SSI. Because the beneficiary’s own resources fund the trust, a Medicaid payback provision is required. Key structural requirements include:
- The trust must be established for the sole benefit of a person with a disability as defined under the SSI program.
- The beneficiary must be under age 65 at the time the trust is established and first funded. No new assets may be added after the beneficiary’s 65th birthday, though the trust continues for assets already held.
- The trust must be irrevocable.
- The trust must be established by the beneficiary, a parent, grandparent, legal guardian, or a court. The Special Needs Trust Fairness Act of 2016 permits the beneficiary to establish their own first-party SNT.
- The beneficiary may not serve as sole trustee of their own first-party SNT without risk of the trust being treated as a countable resource.
- The trustee must hold sole and absolute discretion over all distributions. Any ascertainable standard obligating payment will cause the trust to be treated as a countable resource for Medicaid and SSI purposes.
- Distributions should be made directly to providers of goods and services rather than as cash to the beneficiary, to avoid creating countable income under SSI rules.
- At the beneficiary’s death, New Hampshire DHHS must be reimbursed for all Medicaid benefits paid on the beneficiary’s behalf before any remaining assets pass to other beneficiaries. Under MAM 411, notice must be provided to DHHS upon the beneficiary’s death.
Third-Party Special Needs Trusts
A third-party SNT — sometimes called a supplemental needs trust — is funded with assets belonging to someone other than the beneficiary: parents, grandparents, other family members, or friends. Because the beneficiary never owned the contributed assets, no Medicaid payback is required at death. The grantor freely designates who receives remaining trust assets after the beneficiary’s death, making third-party SNTs the preferred vehicle for family estate planning, life insurance proceeds, and inter vivos gifts.
New Hampshire’s RSA 564-B trust framework provides strong discretionary and spendthrift trust protections. A beneficiary’s creditors generally cannot compel a trustee to make distributions from a purely discretionary trust, protecting third-party SNT assets from creditor claims throughout the beneficiary’s lifetime. Because the assets were never the beneficiary’s property, they also pass entirely outside the DHHS Medicaid estate recovery framework — making the third-party SNT the most flexible and tax-efficient vehicle for families accumulating support resources over time.
Pooled Special Needs Trusts
Pooled trusts are administered by nonprofit organizations that maintain separate sub-accounts for individual beneficiaries while pooling funds for investment management. New Hampshire permits pooled trusts consistent with 42 U.S.C. § 1396p(d)(4)(C). At death of a first-party pooled sub-account beneficiary, DHHS Medicaid payback applies, though the nonprofit may retain a portion as permitted under federal law. Third-party pooled accounts carry no payback requirement.
Pooled trusts are particularly useful when a beneficiary’s trust assets are too modest to justify the overhead of a standalone SNT with a professional trustee. New Hampshire beneficiaries may access national pooled trust programs that accept New Hampshire residents. Administrators of pooled trusts serving New Hampshire beneficiaries should be familiar with MAM 411’s trust review requirement and should coordinate with DHHS to ensure sub-account terms comply with New Hampshire Medicaid policy.
Requirements for Legal Compliance
For SNT assets to be excluded from countable resources under New Hampshire Medicaid and SSI rules, the trust must satisfy the following requirements:
- The beneficiary cannot exercise an unrestricted right to withdraw trust assets.
- The trustee must hold sole and absolute discretion over all distributions.
- The trust must supplement — not supplant, replace, or substitute for — the public benefits to which the beneficiary is entitled.
- First-party trusts must be irrevocable, limited to beneficiaries under age 65 at establishment, and include a valid DHHS Medicaid payback provision.
- The beneficiary may not serve as sole trustee of their own first-party SNT.
- All trusts must be submitted to the DHHS State Office for a formal trust review under MAM 411 before the trust is used in connection with a Medicaid eligibility determination.
New Hampshire is a 1634 state — SSI approval triggers automatic New Hampshire Medicaid enrollment through a data connection between the Social Security Administration and DHHS. No separate Medicaid application is required once SSI is granted, though enrollment in the CFI Waiver and other HCBS programs requires separate application and is subject to functional eligibility and available slots.
New Hampshire does not require a Qualified Income Trust (Miller Trust) for nursing home Medicaid or CFI Waiver eligibility — even when a beneficiary’s income exceeds the standard income cap. Instead, New Hampshire uses a spend-down pathway: the beneficiary’s income above the Protected Income Limit (PIL) — $916/month for a single individual in 2026 — is applied toward the cost of nursing home care or waiver services. This structure means the beneficiary’s income effectively covers a portion of care costs each month, without requiring the formal income diversion instrument mandated in income-cap states like Louisiana, Kansas, and New Mexico. For SNT planning purposes, the absence of a Miller Trust requirement simplifies the income management dimension of New Hampshire planning considerably.
New Hampshire’s Medicaid asset limit for a single applicant is $2,500 — modestly higher than the $2,000 standard applicable in most states in this series. The Community Spouse Resource Allowance permits a non-institutionalized spouse to retain significantly more assets. A properly structured SNT removes trust assets from the countable resource calculation, enabling a beneficiary with a settlement or inheritance to maintain Medicaid eligibility regardless of the trust’s asset level.
New Hampshire Medicaid estate recovery is administered by DHHS. New Hampshire limits estate recovery to the probate estate, not the expanded estate definition used in some other states. An irrevocable SNT, whose assets do not pass through the beneficiary’s probate estate, provides reliable protection from DHHS recovery at the first-party trust’s termination. Third-party SNT assets are not subject to DHHS recovery claims at all, as they were never the beneficiary’s property.
Limitations on Disbursements
A New Hampshire SNT trustee may pay for any goods and services that supplement what New Hampshire Medicaid and SSI already provide. Permissible disbursements include supplemental medical care not covered by Medicaid, dental and vision services, assistive and adaptive technology, additional personal care aide hours beyond what the CFI Waiver funds, home and vehicle modifications, transportation, education, vocational training, recreational activities, entertainment, travel, telephone and internet services, and personal items that enhance quality of life.
Two distribution rules govern the effect of disbursements on SSI:
Food: As of September 30, 2024, food is no longer classified as In-Kind Support and Maintenance (ISM) by SSA. A trustee may now pay for groceries, restaurant meals, food delivery, and dietary supplements without reducing the beneficiary’s SSI payment. Payments should be made directly to vendors rather than as cash to the beneficiary.
Housing: Payments for shelter-related costs — rent, mortgage, property taxes, utilities, and condominium fees — can still reduce SSI by up to the federal ISM cap (approximately $351/month in 2026). New Hampshire SNT trustees should consult specialized counsel before making housing-related disbursements and should consider ownership structures that may reduce or eliminate ISM exposure.
The DHHS MAM 411 trust review is particularly relevant in the disbursement context: the State Office determination will confirm which categories of trust disbursements may be treated as countable income for Medicaid purposes. Trustees should retain a copy of the DHHS trust review determination and update their distribution practices if DHHS modifies its guidance.
Ancillary Issues
New Hampshire Trust Code — RSA Chapter 564-B
New Hampshire adopted the New Hampshire Trust Code (RSA Chapter 564-B) based on the Uniform Trust Code framework. The NH Trust Code provides a comprehensive statutory foundation for trust creation, administration, modification, trustee duties and powers, and beneficiary rights. The code’s strong discretionary and spendthrift trust protections insulate SNT assets from the beneficiary’s creditors and support the trustee’s exercise of sole and absolute discretion over distributions — the cornerstone requirement of a Medicaid-compliant SNT.
The NH Trust Code also permits trust modification and judicial reformation, which can be important when an existing trust lacks SNT-compliant language. Courts and trustees may use the NH Trust Code’s modification provisions to update trust terms that would otherwise jeopardize a beneficiary’s public benefit eligibility — a useful tool when a family member dies leaving trust assets directly to a person with a disability without SNT-compliant terms.
DHHS MAM 411 Trust Review
New Hampshire’s Medical Assistance Manual, Section 411, governs the treatment of trusts in the Medicaid eligibility context. Under MAM 411, all trusts must be forwarded to the DHHS State Office for review before the trust is used in a Medicaid eligibility determination. The State Office reviews the trust to determine whether it constitutes a countable resource for the applicant and whether any disbursements made from the trust are countable income that would affect eligibility.
This review requirement applies to both first-party and third-party SNTs. Trustees and their legal counsel should submit the trust instrument to DHHS promptly — ideally before the Medicaid application is filed — and should not assume that a trust drafted to SNT standards will automatically be accepted by DHHS without review. Medical Fund Advisors maintains the documentation and administrative records necessary to support a DHHS trust review efficiently and to respond to DHHS inquiries about trust distributions or modifications.
Choices for Independence (CFI) Waiver
New Hampshire’s Choices for Independence (CFI) Waiver is the state’s primary HCBS waiver program for seniors and adults with disabilities who are at risk of nursing facility admission. Administered by the DHHS Bureau of Adult and Aging Services, the CFI Waiver is designed as a nursing home diversion program — it provides community-based long-term services and supports (LTSS) that enable beneficiaries to remain in their homes and communities rather than enter institutional care.
Services available under the CFI Waiver include personal care assistance, adult day services, homemaker and chore services, home modifications, assistive technology, transportation, respite care for family caregivers, and care coordination. The current CFI Waiver was renewed for the period July 1, 2022 through June 30, 2027 and was approved by CMS on April 1, 2023. Functional eligibility requires a nursing facility level of care; financial eligibility requires income below $2,982/month and assets below $2,500 (single applicant).
SNT trustees managing trusts for CFI Waiver enrollees should coordinate distributions carefully with the beneficiary’s individualized service plan to ensure trust supplements — and does not duplicate — waiver-funded services. Because the CFI Waiver covers a broad service array, the trustee’s role may focus on specialized or enhanced services not funded by the waiver, discretionary goods and personal items, and quality-of-life expenditures that fall outside the waiver’s scope.
No New Hampshire State Income Tax — ABLE Planning Implications
New Hampshire has no state individual income tax as of January 1, 2025, when the phased elimination of the Interest and Dividends Tax was completed. New Hampshire residents therefore pay no state income tax on wages, interest, dividends, or capital gains. This has two significant implications for SNT planning:
No state income tax deduction for ABLE contributions: Unlike states such as Nebraska ($10,000 deduction) or Michigan ($5,000/$10,000), New Hampshire does not offer a state income tax deduction for contributions to the NH ABLE Plan — because there is no state income tax from which to deduct. This is a neutral factor, not a disadvantage: New Hampshire residents have no state income tax liability to offset in the first place.
No state income tax on trust income: Income earned within a New Hampshire SNT — interest, dividends, capital gains, and other investment returns — is not subject to New Hampshire state income tax. This simplifies trust income reporting and removes one cost layer from annual SNT administration. Federal income tax obligations for the trust remain, and federal tax planning for large SNTs should be addressed with qualified counsel.
The absence of a state income tax makes New Hampshire one of the more administratively efficient states in this series for SNT tax management, alongside Nevada and other no-income-tax states.
NH ABLE Plan
New Hampshire’s ABLE program — the NH ABLE Plan — is administered by the State Treasurer in partnership with the Governor’s Commission on Disability and through the National ABLE Alliance, a multi-state consortium that provides the underlying program infrastructure. Key 2026 features include:
- Annual contributions from all sources are capped at $20,000. Employed beneficiaries may contribute an additional amount up to $15,560 above the standard cap under the ABLE to Work provision.
- Account balances up to $100,000 are exempt from SSI resource counting. Balances above $100,000 suspend (but do not terminate) SSI eligibility.
No state income tax deduction: Because New Hampshire has no state income tax, there is no state income tax deduction for NH ABLE Plan contributions. This is structurally neutral — New Hampshire residents have no state income tax to deduct from.
The ABLE Age Adjustment Act, effective January 2026, raises the qualifying disability onset age from 26 to 46, substantially expanding eligibility for the NH ABLE Plan.
ABLE account estate recovery: New Hampshire exercises Medicaid payback rights against ABLE account balances at the account holder’s death for Medicaid benefits paid after the account was opened. Families may combine a third-party SNT (no payback) with an NH ABLE Plan account (tax-advantaged day-to-day spending), with the SNT funding the ABLE account over time.
Granite Advantage Health Care Program
New Hampshire’s Medicaid expansion program under the Affordable Care Act is called Granite Advantage. Granite Advantage covers adults aged 19 to 64 with household income up to 138% of the Federal Poverty Level (approximately $1,799/month for a single adult in 2026). While Granite Advantage operates under different eligibility rules than the aged/blind/disabled Medicaid programs relevant to most SNT beneficiaries, it is worth noting for planning purposes: some younger adults with disabilities who do not yet qualify for SSI may qualify for Granite Advantage as an interim coverage option. Once SSI is established and standard Medicaid enrollment is triggered (as a 1634 state), coverage transitions to the appropriate aged/blind/disabled category. SNT counsel and administrators should ensure that coverage transitions are handled without gaps.
Administration and Oversight
New Hampshire SNT administration is shaped by two procedural requirements that are less prominent in many other states: the DHHS MAM 411 trust review, which must be completed before the trust is used in a Medicaid eligibility determination, and the ongoing coordination with the CFI Waiver service plan to ensure SNT distributions supplement rather than duplicate waiver-funded services. These requirements, combined with the standard complexity of SSI compliance, multi-decade trust investment management, and fiduciary duties under RSA 564-B, make professional administration a sound choice for virtually any New Hampshire SNT.
The Complexity of the Role Demands Expertise
A New Hampshire SNT trustee must navigate federal SSI rules, New Hampshire DHHS Medicaid policy under MAM 411, the spend-down framework and Protected Income Limit, CFI Waiver service plan alignment, the DHHS trust review process, and the trustee duties imposed by RSA 564-B — all while making individualized distribution decisions that protect the beneficiary’s eligibility. The DHHS trust review adds a procedural layer unique to New Hampshire: submitting the trust instrument, responding to DHHS inquiries, and tracking any changes in DHHS guidance over the trust’s lifetime requires experience with New Hampshire Medicaid policy that most individual trustees do not possess.
Trustees owe a fiduciary duty to act at all times in the beneficiary’s best interests under RSA 564-B. Decisions inconsistent with this standard expose the trustee to personal liability. A professional trustee trained in SNT administration, working alongside Medical Fund Advisors’ administrative expertise, is positioned to manage these obligations reliably over what may be a multi-decade administration.
Professionals Bring Specialized Knowledge That Protects Benefits
Medical Fund Advisors brings expertise in New Hampshire DHHS Medicaid policy, MAM 411 trust review requirements, SSI distribution compliance, and CFI Waiver coordination. Professional administration ensures that the DHHS trust review is completed properly before the Medicaid application proceeds, that distribution records satisfy DHHS documentation requirements, and that trust disbursements are structured to supplement — not jeopardize — CFI Waiver eligibility and SSI compliance throughout the beneficiary’s lifetime. Medical Fund Advisors’ administrative capacity to respond to DHHS inquiries and to adapt distribution practices as policy evolves is a material advantage for beneficiaries who depend on the trust for decades.
Separating Trustee and Administrative Roles Adds Oversight
A professional trustee makes the legal and fiduciary decisions: approving distributions, overseeing trust investments, ensuring compliance with DHHS requirements and RSA 564-B obligations, and providing the DHHS trust review documentation. Medical Fund Advisors handles day-to-day administrative operations: recordkeeping, bill payment, vendor coordination, MAM 411 compliance documentation, and CFI Waiver service plan alignment. This dual-role structure adds a layer of oversight that reduces error risk and ensures no single party bears the full burden of a complex, long-duration administration.
The Recommended Structure
Best practice for New Hampshire SNTs is a layered arrangement: a professional trustee handles fiduciary decision-making and DHHS trust review submission; Medical Fund Advisors serves as the day-to-day professional administrator handling MAM 411 compliance, CFI Waiver coordination, distribution recordkeeping, and vendor payments; and a trusted family member or advocate serves as trust protector with the power to review accounts and remove or replace the professional trustee if warranted. The beneficiary should not hold trust protector removal power over a first-party SNT. This layered structure is fully consistent with RSA 564-B and provides the governance depth appropriate for a trust that may operate across decades of evolving DHHS policy and beneficiary need.
New Hampshire Idiosyncrasies
1634 State — SSI Triggers Automatic Medicaid: New Hampshire automatically enrolls SSI recipients in standard Medicaid. No separate Medicaid application is required once SSI is granted. CFI Waiver enrollment requires a separate functional and financial eligibility determination.
No Miller Trust — Spend-Down to Protected Income Limit: New Hampshire does not require a Qualified Income Trust (Miller Trust) for nursing home Medicaid or CFI Waiver eligibility — even for beneficiaries with income above the standard $2,982/month level. Instead, NH uses a spend-down mechanism where excess income above the Protected Income Limit (PIL) of $916/month for a single individual is applied toward the cost of care. This eliminates the separate QIT instrument required in income-cap states like Louisiana, Kansas, and New Mexico and simplifies income management for New Hampshire SNT planning.
$2,500 Asset Limit: New Hampshire’s Medicaid asset limit for a single applicant is $2,500 — modestly higher than the $2,000 standard in most states in this series. The SNT removes trust assets from this calculation entirely. For married couples, the Community Spouse Resource Allowance permits the non-applicant spouse to retain significantly more assets.
MAM 411 Trust Review — All Trusts Reviewed by DHHS: New Hampshire’s Medical Assistance Manual, Section 411, requires that all trusts be forwarded to the DHHS State Office for a formal review before they are used in a Medicaid eligibility determination. DHHS determines whether the trust is a countable resource and whether any disbursements constitute countable income. Trustees and counsel must complete this review process proactively — before the Medicaid application is filed — to avoid delays in eligibility determination.
RSA Chapter 564-B — New Hampshire Trust Code: New Hampshire adopted its Trust Code based on the UTC framework, providing a comprehensive statutory foundation for SNT creation and administration. The code’s modification and reformation provisions allow courts and trustees to update non-compliant trust terms — a useful remedial tool when existing trusts lack SNT-appropriate language.
CFI Waiver — Choices for Independence: New Hampshire’s primary HCBS waiver program, effective through June 2027, serves seniors and adults with disabilities at risk of institutionalization. Services include personal care, adult day, homemaker services, home modifications, assistive technology, and respite care. SNT trustees should coordinate distributions with the beneficiary’s CFI Waiver service plan to ensure trust supplements do not duplicate waiver-funded services.
No State Income Tax: New Hampshire has had no state income tax since January 1, 2025, when the Interest and Dividends Tax was fully eliminated. There is no state income tax deduction for NH ABLE Plan contributions, and no state income tax on trust investment income. This simplifies annual tax administration for New Hampshire SNTs and removes a compliance layer present in most other states in this series.
NH ABLE Plan — National ABLE Alliance: The NH ABLE Plan is administered through the National ABLE Alliance (a 19-state consortium) under the oversight of the State Treasurer and Governor’s Commission on Disability. Annual contributions are capped at $20,000 ($35,560 with ABLE to Work). No state tax deduction is available. DHHS exercises Medicaid payback rights against ABLE balances at death.
Granite Advantage — ACA Expansion: New Hampshire’s Medicaid expansion program covers adults 19-64 at up to 138% FPL (~$1,799/month). Younger adults with disabilities who have not yet established SSI may qualify for Granite Advantage as interim coverage. Coverage transitions to the aged/blind/disabled Medicaid program once SSI is established. SNT counsel should ensure coverage transitions occur without gaps.
Probate Estate Recovery Only: New Hampshire limits Medicaid estate recovery to the probate estate — not an expanded estate definition. An irrevocable SNT whose assets pass outside the probate estate provides reliable protection from DHHS estate recovery claims. Third-party SNT assets are entirely outside DHHS recovery.
Disclaimer: This summary is for general informational purposes only and does not constitute legal advice. New Hampshire DHHS Medicaid policy under MAM 411, RSA Chapter 564-B, and applicable federal statutes are subject to change, and the application of New Hampshire special needs trust law to individual circumstances requires analysis by a qualified New Hampshire attorney experienced in special needs planning and elder law.
Prepared by Medical Fund Advisors | [email protected] | www.trustmfa.com