DIY Legal Forms

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Supplemental Needs Trust

1. Bequest to Trust. If my son [name of beneficiary] (hereinafter "the Beneficiary") survives me, I give, devise, and bequeath to [name of trustee], in trust nevertheless, . . . . . percent (. . . .%) of my residuary estate [or the sum of . . . . . Dollars ($ . . . )] for the uses and purposes set out below.

a. Purpose. It is the Testator's intent to create a supplemental needs trust that conforms to the provision of Section . . . of the . . . . . . Law of the statutes of the State of [state]. This trust is established as a supplemental needs trust because of the Beneficiary suffer from a disability that impairs his ability to provide for his own care and maintenance and constitutes a substantial handicap. It is the Testator's primary concern in establishing this Trust that it exist as a supplemental and emergency fund to public assistance for the Beneficiary throughout his life, and to provide him with the security that the Testator provided while alive. Therefore, this trust is to be used to supplement and not to supplant, impair, or diminish, any which the Beneficiary may be receiving. Currently, there are basic living needs that public benefit programs for the disabled do not provide. after the Testator has died, it is vitally important that the Beneficiary continue to have these needs met so that he may maintain an acceptable level of human dignity and humane existence.

If this Trust were to be invaded by creditors, subjected to any liens or encumbrances, or cause public benefits to be terminated or not granted, it is likely that the Trust's principal would be depleted before the Beneficiary's death, since the cost of care for such disabled persons is high even if no emergency needs ever present themselves. In that event, there would be no supplemental coverage for emergency or special need. The trust provisions contained in this instrument should be interpreted in this light and my stated intent.

As used in this instrument, the term "supplemental needs" refers to the essential requisites for maintaining the Beneficiary's good health, safety, and welfare when, in the Trustee's discretion, these requisitees are not being furnished by any public agency, office, or department of the State of [state] or of any other state or of the United States. "Supplemental needs" include, but are not limited to, dental care, special equipment, training or educational programs, and necessary travel and recreation.

Notwithstanding the above, the Trustee, in its sole discretion, may make distributions to third parties to meet the Beneficiary's needs for food, clothing, shelter, or health care, but only if the Trustee determines (i) that the Beneficiary's basic needs will be better met if such distribution is made and (ii) it is in the Beneficiary's best interests to suffer the consequent effect, if any, on the Beneficiary's eligibility for or receipt of government benefits or assistance. However, if the mere existence of this authority, whether exercised or not, would, under the terms of any program of government benefits or assistance, result in the Beneficiary's loss of such benefits or assistance, then the grant of this authority to the Trustee shall be null and void and the Trustee's authority to make such distributions shall cease and shall be limited as otherwise provided in this instrument.

b. Distribution of Income and Principal. The Trustee shall pay to or apply for the benefit of the Beneficiary, during the Beneficiary's life, such sums from the Trust's income or principal, up to the whole thereof, as the Trustee, in its sole discretion, from time to time may deem necessary or advisable for the satisfaction of the Beneficiary's special needs. Any income not so distributed shall be added to the principal of the Trust. The Beneficiary does not have the power to assign, encumber, direct, distribute, or authorize distributions from the trust.

c. Governmental Benefits Preference. It is the Testator's intent that, because the Beneficiary is disabled and unable to maintain and support himself independently, the Trustee shall, in the exercise of its best judgement and fiduciary duties, seek support and maintenance for the Beneficiary from all available public resources, including, but not limited to, Supplemental Security Income (SSI), Medicaid, Federal Social Security Disability Income (SSDI), and the appropriate regional center for the disabled. In making distributions to or on behalf of the Beneficiary for his special needs, the Trustee shall take into consideration the applicable resource and income limitations of the government benefit programs for which the Beneficiary is eligible. In carrying out the provisions of this instrument, the Trustee can ignore the probable future needs of the remainderman of this Trust and the remainderman's descendants.

No part of the corpus of this Trust shall be used to supplant or replace the benefits provided by any county, state, federal, or other governmental agency that has a legal responsibility to server persons with disabilities that are the same or similar to the Beneficiary's impairment. For purposes of determining the Beneficiary's Medical eligibility, no part of the principal or undistributed income of the Trust shall be considered to be available to the Beneficiary. If the Trustee is asked to release Trust principal and/or income to pay for equipment, medication, or services that Medicaid is authorized to provide were it not for the existence of this Trust, or if the Trustee is asked to petition a court or any administrative agency for the release of Trust principal or income for this purpose, the Trustee is authorized to deny such request and, in its discretion, take whatever administrative or judicial steps that may be necessary to continue the Beneficiary's Medicaid (or other government benefits) eligibility, including obtaining a ruling from a court of competent jurisdiction that the principal and income of the Trust is not available to the Beneficiary for Medicaid (or other governmental benefits) eligibility. The Testator expressly prohibits application of any state law to the contrary to this Trust. All costs and expenses incurred by the Trustee in carrying out the provisions of this subparagraph c., including reasonable attorney fees, shall be proper charge to the Trust. All references in this instrument to Medicaid shall include any other state's Medicaid equivalent program.

d. Spendthrift Provisions. No interest in the principal or income of this Trust shall be anticipated, assigned, or encumbered, or shall be subject to any creditor's claim or to legal process, prior to its actual receipt by the Beneficiary. Furthermore, because this Trust is to be conserved and maintained for the special needs of the mentally impaired Beneficiary throughout his life, no part of the corpus of the Trust, neither principal nor income, shall be construed to be part of the Beneficiary's estate or be subject to the claims of voluntary or involuntary creditors for the provision of care or services, including residential care, by any public entity, office, department, or agency of the State of [state], or of any other state, or of the United States.

e. Benefits to Be Held Separately. All of the Beneficiary's government benefits shall be held separately by the Trustee and shall not be commingled with the Trust assets. Nothing in this instrument shall be construed to require the addition of government benefits received by or on behalf of the Beneficiary to the Trust assets.

f. Termination of Trust. Notwithstanding anything to the contrary contained in the other provisions of this instrument relating to the Trust, if the existence of the Trust has the effect of rendering the Beneficiary ineligible for Supplementary Security Income (SSI), Medicaid, or any other program of government benefits to which he otherwise would be entitled, the Trustees are authorized to terminate this Trust and to distribute the undistributed principal and income of the Trust in cash or in kind, free of this Trust to [name of remainderman], per stirpes and not per capita. In determining whether the existence of this Trust has the effect of rendering the Beneficiary ineligible for SSI, Medicaid, or any other government benefits, the Trustee is hereby granted full and complete discretion to initiate judicial or administrative proceedings, or both, for the purpose of determining such eligibility. All costs and expenses relating thereto, including reasonable attorney fees, shall be a proper charge to the Trust.

If not previously terminated in accordance with the above provisions of this subparagraph f., the Trust shall cease and terminate upon the Beneficiary's death, and thereupon the Trustee shall distribute and deliver all of the Trust's remaining principal and undistributed income, free of this Trust, to [name of remainderman], per stirpes and not per capita.

Upon the Beneficiary's death, the Trustee may pay any death taxes that, by reason of such death, may be due. All expenses of the Beneficiary's last illness and funeral, and all expenses related to the administration and distribution of the Trust corpus may be paid from the Trust, if in the Trustee's discretion, other satisfactory provisions has not been made for the payment of such expenses. The Trustee shall not pay any expense incurred prior to the Beneficiary's death if the Trustee shall determine that the payment of such expense is the obligation of any county, state, federal, or other governmental agency that has a legal responsibility to serve persons with disabilities that are the same or similar to the Beneficiary's impairment.

g. Nomination of Trustee. The Testator nominates, constitutes, and appoint [name of trustee] whose principal offices are at [address], or its successors, to be the Trustee of the Trust provided for by this Article . . . . . of my Last Will and Testament.

h. Trustee's Powers. It is the Testator's intent to grant to the Trustee the power to deal with all of the Trust property as freely as the Testator could in the handling of his own affairs. The Trustee shall have all the powers and protection granted to Trustees by statute at the time of application, and, in addition and not in limitation of any court, the Trustee shall have the powers and responsibilities described below, to be exercised in its sole discretion. [Set out such additional powers and responsibilities as are desired such as those set out in Form 20.6.09, Paragraph 9.]

i. Trustee's Bond. No bond shall be required of the Trustee for the faithful performance of its duties as Trustee.

j. Trustee's Compensation. The Trustee shall be entitled to compensation according to its schedule of fees for the administration of testamentary trusts as the same may be in effect from time to time.