Types of Special Needs Trusts
1st Party Trust
A 1st party trust, or a self-funded trust is set up by the person with disabilities for his or her own benefit. Receiving a large sum of money through an inheritance, a settlement or the sale of a property, may jeopardize your government assistance. Placing assets into a special needs trust, protects those benefits while allowing you to use the trust for things to better your life.
3rd Party Trust
A 3rd party trust is set up by a parent, grandparent or family member for an individual who is disabled. The funding usually originates from the third party’s own assets, their life insurance or a pension. A 3rd party trust may also be established for future funding, so that, upon the grantor’s death, assets can go directly to the SNT.
How Does a Trust Work?
Funds are deposited into a Special Needs Trust (SNT) for the sole use of a beneficiary with a disability. Once the funds are placed in the SNT, your government assistance will not be effected by these additional assets.
The SNTF is a non-profit 501(C)3 Pooled Trust. All trust accounts are held by Morgan Stanley. Your money is placed in its own account, but is pooled with other trusts to increase your investing power. This allows your money to grow by keeping fees at a minimum.
Your SNT may be accessed for personal care needs, transportation, clothing and more. SNTF may make funds from your trust available to you with a True Link card.
We understand that special circumstances arise. For unexpected items, medical expenses, or even vacations, the SNTF has a distribution request system to pay for these types of expenses.
Our Executive Director, Fiduciary and Board of Directors review distribution requests from the SNT for approval. It is their responsibility to insure that the trust is administered prudently. There may be times when they need to say no to some requests.
Can money be withdrawn from a Special Needs Trust?
A special needs trust is an irrevocable trust. This means once the funds are received into the trust, they cannot be withdrawn. The funds can be used for the sole benefit of the SNT client. The Special Needs Trust Foundation, as trustee, has complete discretion over the distributions from the trust.
