Sample Special Needs Trusts

Here's an example of what a special needs trust might look like.

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Below is one example of a special needs trust.  We’re providing this example just to give you an idea about what your special needs trust might look like. However, we used fictitious facts and people to complete the details of this trust, and we omitted several articles.  So, the trust you make for yourself – or the trust that a lawyer makes for you -- will look different and may provide different solutions to your family’s circumstances.

Learn much more about Special Needs Trusts on Nolo.com.

Sample Special Needs Trust

 

ARTICLE 1. CREATION OF TRUST

Gloria C. Escobar, Grantor, is creating this special needs trust for the benefit of Bessie Escobar, Beneficiary. This trust shall become irrevocable upon execution.

ARTICLE 2. PURPOSE OF TRUST

Beneficiary has a disability and will likely require government assistance during Grantor’s life and after Grantor’s death. Grantor creates this special needs trust to enhance Beneficiary’s quality of life while at the same time preserving Beneficiary’s eligibility for government support and medical assistance programs, including SSI, Medicaid, or other similar programs. Grantor intends this Declaration of Trust to be interpreted in light of this purpose.

ARTICLE 3. EXAMPLES OF SPECIAL NEEDS

1. Grantor intends this trust to provide Beneficiary with goods and services to meet Beneficiary’s special needs, which are needs that are not provided for by any government programs.

2. Special needs include but are not limited to: out-of-pocket medical and dental expenses; medical equipment not provided by Medicaid or similar programs; eyeglasses; exercise equipment; annual independent checkups; transportation; vehicle maintenance; vehicle insurance premiums; life insurance premiums; physical rehabilitation services not covered by Medicaid or similar programs; essential dietary needs; materials for hobbies; tickets for recreational or cultural events; musical instruments; cosmetics; home furnishings; home improvements; computer or electronic equipment; cable television; telephones; televisions; radios; cameras; trips; vacations; visits to friends; entertainment; membership in book, health, record, video, or other clubs; newspaper and magazine subscriptions; athletic training or competitions; personal care attendant or escort; vocational rehabilitation or habilitation; professional services; costs of attending or participating in meetings, conferences, seminars, or training sessions; and tuition and expenses connected with all types of technical degree programs and higher education.

ARTICLE 4. TRUSTEES

1. The following persons or entities shall serve, in the order listed, as trustee(s) of this special needs trust:

  • Trustees: Gloria C. Escobar and Richard Sanchez
  • First Successor Trustee: Jaime L. Sanchez
  • Second Successor Trustee Lola S. Sanchez

2. If Gloria C. Escobar is unavailable to serve, Rafael M. Escobar shall serve as a cotrustee instead.

3. All cotrustees shall act jointly.

4. Cotrustees shall cooperate with each other to carry out the trust purpose set out in Article 2, to prevent harmful and costly duplication of activities, and to avoid unnecessary delay in making disbursements to Beneficiary.

5. If no successor trustee named here is available to serve, Grantor’s administrator or executor may name a trustee to manage this special needs trust. If there is no executor or administrator, the successor trustee of Grantor’s revocable living trust, if any, may name a trustee to manage this trust. In the event there is no successor trustee of Grantor’s revocable living trust, then, on petition of any interested person, a court of competent jurisdiction shall designate the successor Trustee. In no event shall a court obtain jurisdiction over this trust by exercise of this provision. 6. All references to trustee in this trust document include each cotrustee named in this Article.

7. Any trustee may resign at any time. The resigning trustee shall give written notarized notice of the resignation to Beneficiary, Beneficiary’s legal guardian or conservator, all affected agencies, and all persons and entities named in the trust as successor trustees or remainder beneficiaries.

8. If a remainder Beneficiary is also named as a trustee or successor trustee, Grantor is aware of the potential conflict of interest and intends for the trustee or successor trustee to serve as provided for in this Declaration of Trust.

ARTICLE 5. POWERS OF SUCCESSOR TRUSTEES

All authority and powers, including discretionary powers, conferred upon a trustee or cotrustee shall pass to all successor trustees.

ARTICLE 6. CONTRIBUTIONS TO THE TRUST

Trustee shall accept contributions to the trust from any person or entity. However, Trustee shall not accept any assets that are owned by Beneficiary, including public assistance, Social Security benefits, or any other earned or unearned income.

ARTICLE 7. USE OF PRINCIPAL AND INCOME

Income earned from trust property shall be retained in the trust to be used for trust purposes. When making disbursements for Beneficiary’s benefit, Trustee shall keep adequate records to show that current and accumulated trust income is used first, and then trust principal.

ARTICLE 8. TRUSTEE’S DUTY TO COOPERATE IN SEEKING OF GOVERNMENT BENEFITS

Trustee shall cooperate with Beneficiary by providing information that is necessary for Beneficiary to obtain or maintain eligibility for needs-based public benefits and entitlement programs, including, but not limited to, Social Security payments, Supplemental Security Income, Social Security Disability Insurance, veterans

Administration benefits, HUD housing benefits, Medicare, and Medicaid. However, Trustee shall not be responsible to the Beneficiary to obtain or maintain Beneficiary’s eligibility for these programs.

ARTICLE 9. TRUSTEE’S DISCRETION OVER DISBURSEMENTS

Trustee shall have complete discretion in how the trust property is used, provided that the property is used only for the purpose of helping Beneficiary by providing Beneficiary with goods and services that supplement those provided by SSI, Medicaid, or similar programs, and never for a purpose that will eliminate Beneficiary’s eligibility for those programs unless it is in the best interests of the Beneficiary to do so. All actions of Trustee shall be directed toward carrying out the primary purpose of this trust to supplement Beneficiary’s public benefits. Trustee’s discretion to carry out this purpose is absolute. Hence, while Trustee is to be guided by the needs of Beneficiary, as determined by Trustee, in Trustee’s sole and absolute discretion, Trustee is not obliged to make any specific distributions under the terms of this trust. Because Trustee shall be solely responsible for determining what discretionary distributions may be made from this trust, Beneficiary does not have access to principal or income of the trust or authority to direct distributions from the trust for any purpose.

ARTICLE 10. TRUSTEE’S DUTY TO FILE TAX RETURNS AND MAKE REPORTS

1. Trustee shall prepare and fi le all required trust tax returns.

2. Trustee shall provide to Beneficiary, or Beneficiary’s legal guardian, conservator, representative payee, or agent, if any, all information necessary for the reports required by a government agency as a condition of the Beneficiary’s continued eligibility for SSI, Medicaid, and other similar benefits.

3. Trustee shall annually provide Beneficiary, Beneficiary’s legal guardian, conservator,

representative payee, or agent, if any, and the remainder beneficiaries named in Article 12, with written information about trust activity, including an accounting of current trust assets, income earned by the trust, contributions from outside sources made to the trust, disbursements made to meet Beneficiary’s special needs, and an accounting of all purchases by Trustee.

4. Upon request, Trustee shall provide the persons named in Section 3 of this Article with copies of the trust’s annual income tax returns.

5. If, when a remainder Beneficiary inherits property under this Article, he or she is not yet 18 years old, or, in the opinion of Trustee, is unable to prudently manage the property to be distributed and is under the age of 21, Trustee shall either (a) retain that Beneficiary’s share as a custodian under the Uniform Transfers to Minors Act of Kentucky, or (b) name another person to serve as custodian for the property under that Act and distribute the property to that custodian. The custodianship shall end when the remainder Beneficiary turns 21 unless the law requires it to end at age 18. When the custodianship ends, the custodian shall distribute any remaining custodial property to the Beneficiary.

ARTICLE 11. TERMINATION OF THE TRUST

Text omitted.

ARTICLE 12. REMAINDER BENEFICIARIES

Text omitted.

ARTICLE 13. TRUSTEE POWERS

Text omitted.

ARTICLE 14. TRUSTEE COMPENSATION

Text omitted.

ARTICLE 15. SPENDTHRIFT PROVISIONS

Text omitted.

ARTICLE 16. BOND

Text omitted.

ARTICLE 17. PHOTOCOPIES

Text omitted.

ARTICLE 18. TRUSTEE NOT LIABLE FOR GOOD-FAITH ACTIONS

A trustee of any kind nominated by this document shall not be liable to any Beneficiary for the trustee’s acts or omissions, except in cases of willful misconduct, bad faith, or gross negligence.

CERTIFICATION BY GRANTOR

I certify that I have read this Declaration of Trust and that it correctly states the terms and conditions under which the trust property is to be held, managed, and disposed of by the trustee, and I approve the Declaration of Trust.

Dated: June 15, 20xx

Gloria C. Escobar

Gloria C. Escobar, Grantor and Trustee

CERTIFICATION OF TRUSTEE(S)

I certify that I have read The Bessie Escobar Special Needs Trust and, having been appointed as Trustee by Grantor, I agree to serve as Trustee and to manage the trust property under the trust’s terms and conditions.

Dated: June 15, 20xx

Richard Sanchez

Richard Sanchez, Trustee

Learn More About Special Needs Trusts

Learn much more about Special Needs Trusts on Nolo.com, including whether using a Special Needs Trust Form is right for you.

Ready to make your own trust?  Use Special Needs Trust: Protect Your Child’s Financial Future, by Stephen Elias and Kevin Urbatsch (Nolo).

by: , Attorney

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