# NC Special Needs Trust Distributions: In-Kind Support and Maintenance [Call Now Click Here](tel:919-659-8433) Click [HERE](https://caryestateplanning.com/contact-us/) to speak with NC’s trusted statewide Estate Planning, Probate, and Special Needs Planning Law Firm! ![Person Holding Cash](https://caryestateplanning.com/wp-content/uploads/2017/03/pexels-alexander-mils-2068975.jpg) # NC Special Needs Trust Distributions: In-Kind Support and Maintenance Table of Contents Toggle If you search online about “NC Special Needs Trusts” you’re likely to find some materials about what you ***can’t pay for***. They’re often framed in the negative (“don’t buy this with a special needs trust”). I wanted to give an important example of what ***can*** be paid for under the SSI/Medicaid Income and Asset rules. This is the first of several articles explaining the highly complex rules of special needs trust distributions. So, let’s talk about In-Kind Support and Maintenance (or “ISM”). Let’s break it down: ## In-Kind Support and Maintenance In-kind is referring to “things,” as opposed to cash. So, this would refer to the distribution of things to the SNT beneficiary, or paying for things that go to the SNT beneficiary. Support and Maintenance is referring to the purpose of the “things” being distributed – i.e., they are meant to be exclusively for the support and maintenance of the SNT beneficiary. What this really equates to, and the rules and regulations are very strict on this, is that ISM includes **ONLY** food and shelter for the SNT beneficiary. That’s it. Nothing more, nothing less. Just food and shelter. And even within that, the rules and regulations will only allow for a specific list of “things” to be considered ISM, including: 1. Food and Groceries 2. Mortgage payments 3. Home insurance (but only if it is required by the terms of a mortgage) 4. Rent 5. Real property taxes 6. Heating fuel 7. Gas 8. Electricity 9. Water 10. Sewer, and 11. Garbage removal. That’s it. It’s a rigid list. So why is ISM so important? Because distributions of ISM to a SNT beneficiary have a special impact on SSI benefits – it’s treated differently from cash value distributions. ### Impact on SSI Monthly Benefits The benefit of the ISM rule is that you can convey a lot of value to the SNT beneficiary without having a significant reduction in benefits. That’s because the gifting of ISM “stuff” to the SNT beneficiary results in a presumed reduction in benefits of 1/3 of the Federal Benefit Rate of $735/month. So, regardless of the amount you make each month in SSI, it will be reduced by $245 for the month of receipt. However, if your SSI benefit is each to or less than $245 (the 1/3 of FBR), receiving ISM can get you disqualified from benefits. Here are two examples that illustrate these two different rule applications. ### Example 1: Mary Receives $600/month in SSI Mary receives $600/month in SSI benefits. The trustee of her SNT distributes to her $1,500 in groceries and pays $1,000 for the mortgage (and escrows) for her small single-family home. The total value conveyed to Mary is $2,500, but the total amount that Mary’s benefits will be reduced is only $245. So, Mary receives $2,500 from the trust (indirectly) and will still receive $365 that month in SSI benefits. That amount will reset to $600 the following month. ### Example 2: Tom Receives $200/month in SSI Tom receives $200/month in SSI benefits. The trustee of his SNT distributes to him $500 in groceries and paid the electric bill for $75. The total amount of ISM conveyed to Tom is $575, but since Tom only makes $200/month (less than the $245 reduction), he’ll be removed from his benefits, both SSI and Medicaid. ### Be Careful with ISM ISM is a great set of rules when used properly, but rigid adherence to the rules and careful discretion is needed to prevent an inadvertent removal of benefits from the SNT beneficiary. ### Author Bio ![James P. Kelly, ESQ](/wp-content/uploads/2026/05/Paul-Yokabitus.jpg) **Paul Yokabitus** Founder & Estate Planning Lawyer Paul Yokabitus is the founder of Cary Estate Planning, where he helps North Carolina families protect what matters most through wills, trusts, probate, and special needs planning. Known for his “planning, not paperwork” approach, Paul turns complex legal concepts into clear, practical strategies so clients feel informed and confident at every step. He has been recognized as a Business North Carolina Legal Elite attorney and a Super Lawyers Rising Star, and was named to the Triangle Business Journal’s 40 Under 40. A graduate of Campbell University School of Law, Paul lives in the Triangle with his wife, Alix, and their two sons. 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