Get Special Needs Irrevocable Trust Agreement for Benefit of Disabled Child of Trustor

To be effective, a special needs trust must be irrevocable. This means that after you sign it and have it notarized, you can't revoke it, and you can amend or terminate it only under specific circumstances provided for in the trust itself.

By their very nature, special needs trusts are usually designed to terminate, or at least radically change, when the trust's primary beneficiary dies.

Only a court can terminate a special needs trust. As such, attempting to dissolve the trust without court approval will result in liability on your part.

In the case of a “third party” Special Needs Trust, the trust is funded with assets that do not belong to the person with special needs. ... As such, when the beneficiary dies, this trust will not need to contain a “payback provision” which requires any remaining funds to be paid back to the government.

Special needs trusts pay for comforts and luxuries -- "special needs" -- that could not be paid for by public assistance funds. This means that if money from the trust is used for food or shelter costs on a regular basis or distributed directly to the beneficiary, such payments will count as income to the beneficiary.

Significantly, special needs trusts protect the assets of disabled adults while maintaining their eligibility for governmental support. ... Additionally, the funds in the trust account are not subject to creditors or seizure.

A special needs trust restricts the beneficiary's own direct access to the assets in the trust to such an extent that the assets are not considered legally available to the beneficiary. Thus, a special needs trust can protect Medicaid eligibility because assets in the trust are uncountable.

A First Party Special Needs Trust is available to individuals who are disabled and under the age of 65 years. The trust must be funded with the assets of the individual who is disabled and must be created for his or her benefit by a parent, a grandparent, or a legal guardian of the individual or a court.

Special needs trusts pay for comforts and luxuries -- "special needs" -- that could not be paid for by public assistance funds. This means that if money from the trust is used for food or shelter costs on a regular basis or distributed directly to the beneficiary, such payments will count as income to the beneficiary.

Funds held in a properly drafted special needs trust will not affect a Supplemental Security Income (SSI) or Medicaid recipient's benefits. ... If a trust pays for a beneficiary's food or shelter directly to a landlord, restaurant or store, the beneficiary could lose up to one-third of her SSI benefit.