Connecticut Special Needs Trust Rules (2026) | Complete State Guide

1. 1. Connecticut is a 209(b) state — your child faces stricter Medicaid rules than most of the country.
   Most states automatically qualify SSI recipients for Medicaid. Connecticut doesn’t. It’s one of only about 10 states that apply stricter eligibility criteria for disabled individuals. Connecticut’s HUSKY C (Medicaid for the aged, blind, and disabled) asset limit is just $1,600 for an individual ($2,400 for a couple) — a 2026 bill (HB 5302) to raise it to $5,000/$7,500 stalled in committee and is NOT yet law — but it’s still easy to exceed: a small inheritance, a modest savings account, or even accumulated birthday gifts can push your child over the line and cost them their healthcare.
2. 2. Connecticut’s Medicaid estate recovery is among the most aggressive in the nation — and the rules depend on which type of trust you have.
   (For third-party SNTs) — When a Medicaid recipient dies, the state seeks reimbursement. Many states only recover from probate assets. Connecticut uses the expanded definition of estate — meaning the state can pursue assets in revocable living trusts, life estates, and jointly-held property. A revocable living trust alone does NOT protect your assets. You need a properly structured irrevocable third-party SNT. The 5-year lookback period applies to all transfers.

   (For first-party SNTs) — Different rule. Because this trust was funded with your family member’s own money, federal law (42 USC §1396p) requires that any funds left in the trust when they pass away must first reimburse Connecticut Medicaid for benefits paid during their lifetime. This isn’t estate recovery — it’s a payback clause built into the trust itself. Whatever remains after Medicaid is repaid goes to the family. This is the tradeoff for protecting benefits during your family member’s life.

3. 3. Connecticut taxes trust income up to 6.99%.
   Unlike Florida or Texas (which have no state income tax), Connecticut’s graduated income tax tops out at 6.99% on trust earnings. Combined with compressed federal trust brackets (37% above roughly $16,000), undistributed trust income can face a combined marginal rate approaching 44%. Your trustee should distribute income to the beneficiary when possible to shift taxation to the beneficiary’s usually lower individual rate — but must be careful not to exceed resource limits.
4. 4. First-party trusts require Probate Court approval.
   If your child is a conserved person or minor under guardianship of estate, a Connecticut Probate Court must authorize the establishment and funding of a first-party SNT. The trustee may need to be bonded or the accounts restricted. This adds time and cost ($250 filing fee, plus attorney preparation and potential AG review), but it’s a safeguard. Connecticut has 54 probate districts, and while fees are uniform statewide, local practices can vary.
5. 5. PLAN of Connecticut is the only pooled trust based in the state.
   PLAN of Connecticut — authorized by the state legislature in 1990 and providing fiduciary services since 1993 — is the only Connecticut-authorized pooled trust. Setup cost is approximately $1,050. They offer first-party pooled trusts, individual first-party trusts, and third-party trusts. For individuals over 65 who can’t establish individual first-party trusts, the pooled trust is the only self-settled option. (A Connecticut resident can, in principle, use an out-of-state pooled trust, since federal law allows these across state lines — but attorneys report it can create confusion in the probate courts, so most families use PLAN of CT.)
6. 6. The trust can pay for groceries without reducing your child’s SSI.
   This changed in September 2024. Before that, buying food with trust money cut the SSI check. It doesn’t anymore. In Connecticut, where the cost of living is high and every dollar matters, this is a meaningful change for daily quality of life.
7. 7. The trust paying for housing DOES still reduce SSI.
   Rent, mortgage, utilities — if the trust pays those, the SSI check goes down (up to about $351/month). In a state where average rents routinely exceed $1,500, this tradeoff matters — but it’s usually still worth it. Talk to your attorney about structuring distributions to minimize the impact.
8. 8. ABLE CT offers a state tax deduction — and no longer faces Medicaid payback at death.
   Connecticut’s ABLE program offers up to $5,000 ($10,000 for joint filers) in state income tax deductions for contributions — a real benefit many families miss. And as of October 1, 2023, Connecticut no longer counts money in a Connecticut ABLE (ABLE CT) account when it seeks Medicaid estate recovery (Public Act 23-137, §59). To the extent federal law allows, your ABLE CT balance is protected from state Medicaid payback at death. Eligibility also expanded in January 2026 — the disability must simply have begun before age 46 (up from 26), making thousands more Connecticut residents eligible.
9. 9. Working disabled individuals can earn up to $85,000/year and keep Medicaid.
   Connecticut’s MED-Connect program lets people with disabilities work and earn substantial income without losing their HUSKY Medicaid coverage. This is one of the most generous working-disabled programs in the country. If your child works, make sure their attorney knows about MED-Connect — trust distributions and employment income need to be coordinated.
10. 10. Connecticut runs two separate waiver tracks — and the wait depends entirely on which one your child needs.
    Which waiver your child qualifies for turns on their diagnosis, and the two tracks could not be more different on wait times:
    • Autism Waiver (DSS) — for people with autism and an IQ of 70 or above (autism without intellectual disability). It is badly oversubscribed: about 2,652 people were on the waitlist as of April 2026, with some families waiting more than 10 years. The state expanded funded slots to 690 and added case managers in 2026, but the list keeps growing.
    • Intellectual disability waivers (DDS) — the Comprehensive (COMP), Individual and Family Support (IFS), and Employment and Day Supports (EDS) waivers, for people with an IQ under 70. There is no emergency waitlist for day and employment supports — those generally flow as students age out of school. Residential supports (group homes, supported living) are a different story: DDS allocates them through a separate Waiting List and Planning List that can involve long delays.

    Either way, call your regional DDS office or dial 2-1-1 to start the process the moment your child has a diagnosis — even if they’re young and you don’t need services yet.

11. 11. The person managing the trust (the “trustee”) has to account for every dollar — no matter what type of trust you set up.
    Whether you created a third-party trust (funded with your money) or your child has a first-party trust (funded with theirs), Connecticut law (Conn. Gen. Stat. § 45a-499kkk) gives your family the right to request a full accounting of how trust money is being spent. This isn’t optional — it’s the law. If a bank, attorney, or family member is serving as trustee and won’t show you where the money is going, that’s a red flag.

From my 15+ years helping families (including my own):

1. Leaving money directly to your disabled child. A well-meaning grandparent leaves $50,000 in a will to your child — and with Connecticut’s $1,600 HUSKY C asset limit, they lose HUSKY C Medicaid immediately. In Connecticut, disclaiming the inheritance doesn’t fix it — SSA treats refusal as “constructively received” and may trigger up to 3 years of benefit ineligibility. Every dollar meant for your child needs to go through the trust, not to them.
2. Thinking a revocable living trust protects assets from Medicaid. This is a critical Connecticut-specific trap. Because CT uses the expanded definition of estate for Medicaid recovery, the state can pursue assets in revocable living trusts, life estates, and jointly-held property. A revocable trust is NOT protection in Connecticut — you need a properly structured irrevocable SNT.
3. Not updating beneficiary designations. Life insurance, IRAs, 401(k)s, TOD/POD accounts — all of these bypass wills and trusts entirely. If they name the disabled person directly, assets go straight to them and destroy their benefits. Name the SNT as beneficiary on every account that could pass assets to your child.
4. Not knowing about MED-Connect. Connecticut’s MED-Connect program lets working disabled individuals earn up to $85,000/year and keep full HUSKY Medicaid coverage. Many families either don’t know it exists or don’t coordinate it with their trust. If your child works, this program and the trust need to work together.
5. Choosing the wrong trustee. Naming a sibling informally — without considering their knowledge of SSI/Medicaid rules, financial competence, or family dynamics — has zero legal protection. PLAN of Connecticut can serve as professional trustee, and they maintain a registry of over 180 attorneys across the state who specialize in this area.
6. Overlooking the ABLE account and its tax deduction. ABLE CT offers a state income tax deduction of $5,000 (single) or $10,000 (joint) for contributions, with a 5-year carryforward. Many Connecticut families miss this. ABLE funds can be used for housing and food without SSI complications — unlike trust distributions. The age-of-onset requirement expanded from 26 to 46 in January 2026, making thousands more Connecticut residents eligible.
7. Waiting until after you die to set up the trust. If you’re reading this page, do it now. Not next year. Your estate plan, your will, your life insurance beneficiary designations — all of it needs to point to the trust before something happens to you. In a high-cost-of-living state like Connecticut, SNTs need more funding than national averages — start early and fund consistently.

The best way to avoid these mistakes? Work with an attorney who knows Connecticut special needs law. Find Connecticut attorneys →

Connecticut families: Know this about ABLE Medicaid payback.

As of October 1, 2023, Connecticut no longer includes money in a Connecticut ABLE (ABLE CT) account in its Medicaid estate-recovery claim (Public Act 23-137, §59, amending Conn. Gen. Stat. §17b-95). To the extent federal law permits, ABLE CT balances are protected from state Medicaid payback at the beneficiary’s death — a meaningful advantage over first-party SNT funds, which do carry payback. Combined with the state tax deduction, tax-free growth, simpler management, and the ability to pay for housing and food without ISM complications, that makes ABLE CT a powerful complement to an SNT.

Beyond the Trust: Other Connecticut Planning Steps

Guardianship & Conservatorship: When your child turns 18, you may need legal authority to help with decisions. Connecticut uses both terms with distinct legal meanings — guardianship for individuals with intellectual disability (IQ 69 or below), and conservatorship for those with IQ 70 or above. Filing can begin 180 days before your child turns 18 through Probate Court. Connecticut does not yet have a formal supported decision-making law, though courts are encouraged to consider SDM alternatives. Compare your options →
Medicaid Waivers: Connecticut’s DSS Autism Waiver (autism without intellectual disability) has roughly 2,652 people waiting, some over 10 years. DDS intellectual-disability waivers have no emergency waitlist for day and employment supports, though residential supports are allocated through a separate waiting/planning list. Call 2-1-1 or your regional DDS office to start the application immediately. Learn about waivers →