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.

DISCLOSURE: This information is not designed, meant, nor does it constitute the rendering of legal or tax advice. You should consult with your attorney and/or tax advisor before implementing any strategy discussed here. Trust services provided by MEMBERS Trust Company are not federally insured, are not obligations of or guaranteed by the credit union or any affiliated entity, involve investment risks, including the possible loss of principle. MEMBERS Trust Company is a federal thrift regulated by the Office of the Comptroller or the Currency.

Ryan Hahn Trust Administrator

Wealth Management Center

110 S. Main St. South Bend, Indiana 46601 (574) 284-6210, ext. 6232

Professional Forum . . .

Your exclusive opportunity to present common questions or concerns “Adults 50 Years And Better” may have relating to your product(s) or service.