Professional Services

Q. What are the different types of special needs trusts?

A. First-Party Special Needs Trusts

A first-party special needs trust is typically created when a person with special needs has assets—or expects to receive assets through an inheritance, divorce, or legal settlement— that would prevent eligibility for government benefits. The beneficiary’s own assets fund the irrevocable trust, and the trust language must require that the account balance will reimburse the state Medicaid agency upon the person’s death.

Third-Party Special Needs Trusts

A third-party special needs trust is created with the assets of family or friends to provide financial assistance to an individual with special needs and preserve the beneficiary’s access to SSI and Medicaid. There is no reimbursement requirement for a third-party special needs trust.

Ryan Hahn Trust Administrator

Third-party special needs trusts can also benefit additional beneficiaries. For example, the trustee has the power to authorize payments for family and friends to encourage travel, activities, and relationship building with the beneficiary. Contact TCU Trust Services for more information.

Hahn Trust Administrator

Ext. 2319