Special Needs Trust Administration

Establishing a Special Needs Trust

Special Needs Trusts are used to improve the quality of life of an individual with a disability without disqualifying him or her from receiving public benefits.

Trust & Wealth Partners’ professional staff includes specialists who are trained and experienced in navigating the many challenges to provide superior solutions for the trust beneficiary.

The three types of special needs trusts where a beneficiary may receive means-tested benefits are:

Self-Settled or First Party Trusts

Self-Settled or First-Party Special Needs Trusts are most often used when the individual with a disability receives a court settlement. They are established by the individual, or for the benefit of the individual by a parent, grandparent, legal guardian of the individual, or by the court. The trust is funded with the beneficiary’s own funds, and the individual must be disabled pursuant to the Social Security definition of “disability” (42 U.S.C. § 1382c(a)(3)). The trust must contain Medicaid payback provisions and must be funded before the beneficiary turns 65 years old. Self-Settled Special Needs Trusts are authorized under 42 U.S.C. § 1396p(d)(4)(A).

Third Party Special Needs Trusts

Third-Party Special Needs Trusts are commonly used by persons planning in advance for a loved one with special needs. The parents of an individual with disabilities, a grandparent, a sibling, or any other person (other than the beneficiary) may establish the trust. There are no Medicaid payback provisions or obligation when the trust is solely funded with resources from third parties and not from the beneficiary.

Pooled Trusts

Pooled Trusts are often used for small trusts. A separate account is maintained for each beneficiary. However, the resources of many beneficiaries may be pooled together, and those resources are typically managed by a non-profit association. Pooled Special Needs Trusts are authorized under 42 U.S.C. § 1396p(d)(4)(C).