Individual Third Party Trust (Not Pooled)

A third party discretionary trust is a vehicle through which family members and friends can provide funds for the benefit of an individual with a disability without jeopardizing the disabled individual’s eligibility for means-tested benefits such as supplemental security income (SSI) and Medical Assistance.

The features of that trust include:

  • $5,000 minimum deposit
  • Can be established by any third party (usually parents) during their lifetime or deferred until funds are distributed under an estate plan.
  • Other family and friends may also contribute to it
  • Protected from creditors and lien holders
  • Trustor may choose the remainder beneficiaries
  • May be revocable or irrevocable
  • Beneficiary does not have the legal authority to revoke the Trust or direct the use of the Trust assets
  • Distributions are made at the discretion of PLAN. Funds cannot be available or accessible to the Beneficiary.
  • The funds are to be used to “supplement not supplant” any government benefits. They generally cannot be used for food or shelter, or for anything that can be used to obtain food or shelter.

Individual First Party Trusts (d)(4)(a)

Unlike third-party trusts, which are funded by property owned by someone other than the beneficiary, a first-party trust is funded with the assets owned by the person with special needs (beneficiary). A first party SNT–also referred to as a “self settled” or “(d)(4)(A)” Trust–may be established to protect current or future means-tested government benefits if an individual is about to receive a settlement, inheritance or other monies that will bring his countable assets to more than $2,000.

Unless these funds are sheltered in a first party SNT or spent down by purchasing exempt resources, the beneficiary would lose his benefits and be required to pay medical bills and other expenses from the assets until those assets were under the $2,000 limit. If the trust is created properly, adhering to strict government rules, those assets can be used to benefit the person with special needs without jeopardizing eligibility for government benefits.

Please contact PLAN for more information.

Pay-As-You-Go Services

The family contracts with PLAN to provide services on a pay-as-you-go basis. This is commonly used when a beneficiary already has a trust in place.