This form is a trust used to provide supplemental support for a disabled beneficiary without loss of government benefits. It may be revocable or irrevocable, as the funds are contributed by a third party, and not the beneficiary. The Omnibus Budget Reconciliation Act of 1993 established the supplemental needs trusts.
Massachusetts Supplemental Needs Trust for Third Party — Disabled Beneficiary is a legal arrangement designed to ensure the financial security and well-being of individuals with disabilities. This trust is established by a third party, typically a family member or loved one, to provide additional financial support while preserving eligibility for government benefits such as Medicaid and Supplemental Security Income (SSI). The primary purpose of a Massachusetts Supplemental Needs Trust for Third Party — Disabled Beneficiary is to supplement the beneficiary's government benefits, rather than replacing them. By holding assets in this trust, the beneficiary can enjoy a higher quality of life without jeopardizing their eligibility for vital assistance programs. There are various types of Massachusetts Supplemental Needs Trusts (Sets) available for disabled beneficiaries, each tailored to specific circumstances. Some common types include: 1. First-Party or Self-Settled SET: This type of SET is primarily funded with the beneficiary's own assets, usually from personal injury settlements, inheritances, or other windfalls. First-party Sets must include a "payback provision," meaning that upon the beneficiary's passing, any remaining assets in the trust must first repay the state for any Medicaid benefits received. 2. Third-Party SET: Created and funded by someone other than the beneficiary, third-party Sets are commonly established by parents, siblings, or other relatives. Unlike first-party Sets, these trusts do not require a payback provision and allow the remaining assets to be distributed to other family members or charities upon the beneficiary's death. 3. Pooled SET: Pooled trusts are managed by nonprofit organizations, functioning as trusts within a larger pool containing assets from multiple beneficiaries. This option is suitable for those who don't have a substantial amount to fund their independent trust or lack a suitable trustee. 4. Testamentary SET: This trust is created through the provisions of a last will and testament, ensuring that assets pass into the trust upon the death of the granter. Testamentary Sets are useful when the granter wishes to provide for a disabled beneficiary after their own demise. Establishing a Massachusetts Supplemental Needs Trust for a disabled beneficiary is a complex process that requires careful consideration of legal requirements and regulations. Consulting with an experienced attorney who specializes in disability law and estate planning is crucial to ensure compliance and maximize the benefits available to the beneficiary.
