Recently, I gave a presentation to parents about special needs trusts. These trusts, if carefully drafted, allow beneficiaries to have their cake and ice cream: an inheritance from their parents and their public assistance. If not drafted properly, however, the recipient’s government benefits could be reduced or even eliminated. One participant shared the story of her uncle’s trust, referred to by the family as “The Oops Trust” because her disabled uncle wound up as the beneficiary of a trust that did just that: it disqualified him from continuing to receive his public assistance. The well-meaning relative believed she was doing something good by creating a trust for her son, but in fact, she made it more difficult for him, and as a result, he ends up with less than he would have had if the trust had been drafted properly. The day after that presentation, I received a call from a man wishing to create a special needs trust for his stepson, who was receiving government benefits and had just come into a sizable inheritance. The man was doing the right thing: calling right away to find out the best way to protect his stepson’s benefits. Unfortunately, once again, a well-meaning relative left an inheritance to the disabled beneficiary outright, rather than into a special needs trust. Because the money rightfully belonged to the beneficiary once the relative died, it was now in his name, precluding his stepfather from creating a third-party trust that could allow the stepson to receive all of his state benefits and distributions from the trust. The man was very dismayed to find out that any trust created at this point would have to include a payback provision to the state. If you have a child with a disability who may one day receive public benefits, make sure your relatives do not leave inheritances to him or her outright. It may seem like an awkward conversation to have, but if you know they plan to leave your child money, it is safe to assume that they would not want their gift to adversely affect your child!