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A first-party Special Needs Trust is a trust that is used when the person with a disability who is receiving government benefits such as SSI comes into money in their own name. This can happen as a result of a lawsuit where the person with a disability Receives a settlement from a lawsuit, or inherits money in their own name. this type of trust can be used to allow a person who has Assets in their own name and then becomes disabled to qualify for SSI or other governmental benefits. The first party Special Needs Trust is authorized under 42 U.S.C. § 1396p(d)(4)(A).

For any person with a disability who needs to qualify for governmental benefits even if they have Assets in their own name, it is important to explore these options to maximize government benefits and maintain a high quality of life.

A major difference between a first-party trust and a third party Trust is that on the death of the beneficiary the first party trust requires a payback to State Medicaid services of any assets remaining in the trust. a third party Trust does not have this requirement. on the death of the beneficiary of a third party Trust the assets Can be distributed to the beneficiaries heirs or transferred per the terms of the trust.

The Benefits of a First Party Trust

Shelter Assets From Government Benefits

The first party Trust allows a person to qualify for government benefits when they have Assets in their own name. this can be when the person with a disability comes into money in their own name either by inheritance or a lawsuit, etc or when a person with assets becomes disabled. having a first party trust allows them to qualify for government benefits and still retain their assets.

Protect Assets From Creditors

The first party Trust Will protect assets in the trust from creditors.

Meet Tom Sannicandro

I am a special needs planning attorney and an expert in Special Needs Trusts and have been practicing disability law for more than 20 years. I am the father of an adult son with Down syndrome, so I know the challenges that families face when trying to provide a future for all their children. So if you are looking for an attorney for special needs planning, look no further. After years of the practice of law, I thought the best way to give back would be to provide special needs estate planning resources and documents for families with a child with special needs in an easy and affordable way. That is why I created this 501(c)(3) nonprofit corporation to provide families with an affordable way to protect their loved ones. Visit our planning resource center now by clicking here or set up a free appointment with me by clicking here!

Frequently Asked First Person Trust Questions

What Does SNT mean in a trust?

The term S&T refers to a special needs trust, also known as a supplemental Needs Trust.

What is another name for a special needs trust?

Special needs trusts are also known as supplemental needs trusts or SNT. It is a type of irrevocable trust providing numerous benefits. It allows people with disabilities who receive government benefits to continue to be able to receive government benefits while allowing them to use the assets in the trust to supplement those government benefits.

What are the pros and cons of having special needs trust?

Pros

Asset management
Maximizing/maintaining government benefits
Protection from creditors
Allows people retain their expected lifestyle by utilizing government benefits and other assets

Cons

Lack of control, Trustee would control all money
More complex record keeping
Difficulty identifying an appropriate trustee.
Cost of setting up the Trust

Will Income from a trust affect my SSDI benefits?

Income from the trust assets will not affect SSDI or any other government benefits.

What is a First Party Special Needs Trust, and how does it relate to special needs planning?

A First Party Special Needs Trust is a legal tool used in special needs planning to protect the assets of an individual with disabilities who is a trust beneficiary and also relies on government benefits such as Social Security. This trust allows the individual to receive public benefits while safeguarding additional assets within the trust.

How does a First Party Special Needs Trust impact eligibility for government benefits?

Establishing a First Party Special Needs Trust is designed to preserve eligibility for crucial government benefits, like Social Security and other public assistance programs. By placing assets into the trust, the individual can maintain eligibility for these benefits without risking disqualification due to excess assets.

Can a First Party Special Needs Trust be used in conjunction with an ABLE account?

Yes, it can. While an ABLE account is a valuable tool for certain disability-related expenses, a First Party Special Needs Trust can complement an ABLE account by accommodating a broader range of assets and providing additional flexibility in managing resources for the trust beneficiary’s benefit.

What types of benefits can a trust beneficiary receive from a First Party Special Needs Trust?

A First Party Special Needs Trust can provide for a variety of supplemental needs and services not covered by public benefits. This can include medical expenses, education, personal care, and other quality-of-life enhancements that contribute to the well-being and comfort of the trust beneficiary.

How does a First Party Special Needs Trust address the management of assets for the trust beneficiary?

The trust is structured to carefully manage and disburse assets on behalf of the trust beneficiary, ensuring that the funds are used to enhance their quality of life without jeopardizing their eligibility for essential government benefits. This proactive approach allows for the responsible management of assets while prioritizing the individual’s ongoing access to public benefits.