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Disability Trusts
These trusts are also referred to as (d)(4)(A) trusts, which alludes to where they can be found in the Federal statute that authorizes them. Due to common usage, this is usually the type of trust most people are referring to when they use the term “special needs trust.” To establish a valid Disability Trust, it must satisfy the following legal requirements.
The trust must be established for the sole benefit of the trust beneficiary by the beneficiary’s parent, grandparent, legal guardian, or the Court. The beneficiary must be under 65. Any assets in the trust must belong to the beneficiary. Disability Trusts require a payback provision. At the death of the beneficiary, any remaining funds must be used to reimburse the State for medical benefits provided over the individual’s lifetime.
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