Managing Supplemental Needs Trusts (SNTs) for beneficiaries receiving federal housing subsidies is complex and requires careful thought to navigate the challenges of Housing and Urban Development (HUD) regulations, determining income limits, and handling trust distributions under updated Housing Opportunity Through Modernization Act (HOTMA) regulations. Key HOTMA changes, that took effect January 1, 2024, include counting trust income as household income for rent calculations while excluding principal distributions. These changes aim to ensure that individuals relying on special needs trusts can more easily qualify for housing assistance while ensuring consistent treatment of their financial resources across housing programs. Trustees must carefully interpret these updated trust income rules by working with an attorney familiar with special needs planning, coordinating with housing authorities, and exploring options like ABLE accounts to minimize financial impact on beneficiaries. Full compliance with the new rules is required by July 2025.

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