| A Special-Needs Trust is a trust established for the | | | | and whether making the distribution is in the best |
| benefit of a disabled beneficiary who is entitled to | | | | interest of the beneficiary. If the trustee agrees to |
| receive governmental assistance. The intent of the | | | | the distribution, the trustee will pay for the good or |
| trust is to provide for the beneficiary | | | | service directly from the trust account to the vendor. |
| above-and-beyond the supplemental assistance | | | | Protective wording should be inserted in the trust to |
| without accidentally turning that Federal aid "faucet" | | | | clarify that the trustee is to expend income and |
| off. The correct drafting of this type of trust is very | | | | principal only after Federal, state, and local public |
| important since errors can result in the loss of | | | | assistance is received and exhausted. The income |
| government assistance or trust income. | | | | and principal should only be used for the benefit of the |
| The payment of income and principal should be entirely | | | | beneficiary. A spendthrift clause should also be |
| left to the discretion of the trustee and the beneficiary | | | | included in the trust to avoid the possibility of the |
| should never be given the option to act as their own | | | | government's attaching the trust property to be |
| trustee. In addition, cash payments should never be | | | | reimbursed for its public assistance payments. |
| made directly to the beneficiary. Instead, the trust | | | | Choosing an attorney to draft a Special-Needs Trust is |
| should simply pay for the items that are needed by the | | | | not always an easy task. Drafting a Special-Needs |
| beneficiary. This is important because any money | | | | Trust is highly specialized and you want someone who |
| the beneficiary receives may reduce their | | | | is experienced in this area. Choose someone whom |
| Supplemental Security Income or may even cause a | | | | you can trust and you feel comfortable with because |
| total loss of Medicaid benefits. | | | | the Special-Needs Trust will last for the lifetime of the |
| The beneficiary, or their guardian, will ask the trustee to | | | | beneficiary and your attorney will be a crucial part of |
| make a distribution. The trustee will consider whether | | | | your financial team. |
| or not he or she is permitted to make the distribution | | | | |