North Dakota Special Needs Trust Rules (2026) | Complete State Guide

1. 1. SSI does NOT automatically qualify your child for Medicaid in North Dakota.
   This catches families off guard. North Dakota is one of only about 11 states — called a “209(b) state” — where getting SSI does not mean you automatically get Medicaid. You have to apply for Medicaid separately, and the state uses its own eligibility rules. The asset limit is $3,000 (higher than SSI’s $2,000), but the extra step means more paperwork and potential delays. Don’t assume your child is covered just because they receive SSI.
2. 2. North Dakota has one of the most aggressive Medicaid estate recovery programs in the country — and the rules depend on which type of trust you have.
   (For third-party SNTs) — Under NDCC 50-24.1-07, North Dakota can recover from joint tenancy property, life estates, living trusts, transfer-on-death accounts, and even assets transferred to a spouse at any time during the marriage. The ND Supreme Court has interpreted this broadly. A properly drafted irrevocable third-party special needs trust is one of the few tools that can protect assets from this reach.
   
   (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 North Dakota 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. If your family has oil or mineral rights, your trust needs special language.
   This is unique to North Dakota. The Bakken formation means many families own mineral rights — and Medicaid has specific valuation formulas: producing minerals are valued at 3x annual royalty income, leased but not producing at 2x the lease amount. Royalty income counts as both income and an asset for Medicaid purposes. If mineral rights pass to your disabled child through inheritance without a trust, those rights alone could disqualify them from benefits.
4. 4. North Dakota’s trust income tax rate is among the lowest in the country.
   The state taxes trust income at just three brackets: 0% on the first $4,000, 1.95% on income up to $10,750, and a maximum of 2.50% above that. Compare that to California (13.3%), New York (10.9%), or even neighboring Minnesota (9.85%). There’s also no state estate tax and no inheritance tax — both were repealed years ago. This tax-friendly environment is a genuine advantage for trust planning.
5. 5. North Dakota’s DD waiver has essentially no waitlist.
   This is remarkable. Most states have waitlists measured in years — sometimes decades. North Dakota’s traditional IID/DD waiver has 4,365 slots serving approximately 4,302 people, with little to no waiting. The state also added a new Autism Spectrum Disorder waiver in late 2025 for children birth through age 20. If you haven’t applied for waiver services, do it now — North Dakota is one of the few states where you can actually get them.
6. 6. North Dakota doesn’t have its own ABLE savings program.
   North Dakota is one of only four states without a state-run ABLE program. The Bank of North Dakota assessed the costs and decided residents would get lower fees and more investment options through out-of-state plans. Your loved one can open an account in any state that accepts non-residents — Ohio’s STABLE Account and CalABLE are popular choices. There’s no state tax deduction for ABLE contributions since there’s no state plan.
7. 7. The trust can pay for groceries without reducing your child’s SSI.
   This changed in October 2024. Before that, buying food with trust money cut the SSI check. It doesn’t anymore. This is a meaningful improvement for families using trusts to cover daily living costs.
8. 8. 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 2026). That’s the tradeoff, and it’s worth understanding before your trustee starts writing checks.
9. 9. Existing trusts can be updated without going to court.
   North Dakota allows trust decanting under NDCC Chapter 59-16.1 (enacted 2017). If you have an older trust that doesn’t account for the 2024 food rule change, the ABLE age expansion, or other updates, a trustee with discretionary authority can restructure it into a new trust with updated terms. It requires 60-day notice to beneficiaries, but no court approval. This can save thousands in legal fees.
10. 10. North Dakota is creating a new Office of Guardianship — a major reform starting in 2026.
    Senate Bill 2029 creates an independent Office of Guardianship and Conservatorship with powers to license and register professional guardians, investigate complaints, and take disciplinary action. It takes effect in early 2026. North Dakota also has a supported decision-making law (since 2019, NDCC 30.1-36) that courts must consider before appointing a guardian. In North Dakota, a “guardian” handles personal decisions and a “conservator” handles finances — these are separate appointments.
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), North Dakota law (N.D. Cent. Code § 59-16-13) 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. Not realizing SSI doesn’t mean Medicaid in North Dakota. In most states, getting SSI automatically qualifies your child for Medicaid. Not here. North Dakota is a 209(b) state with separate Medicaid eligibility rules. Families who assume they’re covered find out the hard way when services are denied. Apply for Medicaid separately — don’t wait.
2. Ignoring mineral rights in your estate plan. This is the single biggest North Dakota-specific trap. If grandpa’s mineral rights pass to your disabled child through a will or intestacy, Medicaid values producing minerals at 3x annual royalty income. Even modest mineral interests can push your child over the $3,000 asset limit instantly. Those rights need to go through the trust.
3. Thinking a TOD deed or joint tenancy protects assets from Medicaid. In many states, transfer-on-death deeds and joint tenancy avoid probate and estate recovery. Not in North Dakota. The state’s expanded recovery law (NDCC 50-24.1-07) reaches all of these. The only reliable protection is a properly drafted special needs trust.
4. Leaving money directly to your disabled child. A well-meaning grandparent leaves $50,000 in a will to your child — and destroys their Medicaid and SSI eligibility. In North Dakota, the Medicaid asset limit is just $3,000. Every dollar meant for your child needs to go through the trust, not to them.
5. Using a generic trust template instead of a North Dakota attorney. North Dakota follows the Uniform Trust Code, but it also has unique rules around mineral rights, expanded estate recovery, and agricultural land that a template from the internet won’t address. The state’s anti-corporate farming law has specific trust exceptions (NDCC 10-06.1-09) that must be properly structured.
6. Not knowing that farmland CAN go into a special needs trust. North Dakota’s anti-corporate farming law prohibits most corporate farmland ownership, but trusts for the benefit of an individual are specifically exempted. If your family has agricultural land, a properly drafted SNT can hold it — but the trust language matters. Get this wrong and the farmland could be challenged.
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.

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

Heads up on ABLE Medicaid payback:

Given North Dakota’s expanded estate recovery posture, the state likely exercises its right to file Medicaid claims against ABLE account balances at death. Ask about this before opening an account — and coordinate ABLE savings with your trust strategy.

Beyond the Trust: Other North Dakota Planning Steps

Guardianship: When your child turns 18, you may need legal authority to help with decisions. North Dakota uses “guardian” for personal decisions and “conservator” for finances — these are separate appointments. The state has a supported decision-making law (2019) that courts must consider first. A new Office of Guardianship and Conservatorship (SB 2029) launches in 2026 to license and oversee professional guardians. Compare your options →
Medicaid Waivers: North Dakota’s DD waiver has essentially no waitlist (4,365 slots) — rare among states. A new Autism Spectrum Disorder waiver (ages 0–20) launched in late 2025. Apply through ND HHS at (701) 328-4630. Learn about waivers →