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.
Texas Supplemental Needs Trust for Third Party — Disabled Beneficiary is a legal arrangement established to protect individuals with disabilities in Texas and ensure they can maintain eligibility for government benefits while receiving additional financial support. This trust is created and managed by a third party, typically a family member or close friend, for the benefit of the disabled individual. The primary purpose of a Texas Supplemental Needs Trust for Third Party — Disabled Beneficiary is to provide supplementary funds that enhance the quality of life for individuals with disabilities without jeopardizing their eligibility for means-tested benefits such as Supplemental Security Income (SSI) and Medicaid. By properly structuring the trust, it can be an invaluable tool for ensuring continued access to vital government benefits that cover medical expenses, housing, and other essential needs. There are two main types of Texas Supplemental Needs Trust for Third Party — Disabled Beneficiary: 1. Standalone or Self-Settled Supplemental Needs Trust: This type of trust is funded with the disabled individual's funds, usually proceeds from a personal injury settlement, inheritance, or other windfall. It allows the beneficiary to maintain eligibility for government benefits by placing these funds in the trust, where they are managed by a trustee according to the trust's terms. 2. Third-Party Supplemental Needs Trust: This variant of the trust is established and funded by someone other than the beneficiary with their own assets, such as a parent, grandparent, or sibling. It enables the third party to provide financial support for the disabled individual without affecting their means-tested benefits. Both types of Texas Supplemental Needs Trust for Third Party — Disabled Beneficiary must adhere to certain eligibility requirements and guidelines set by federal and state laws. The trust must be irrevocable, meaning it cannot be modified or terminated without court approval. Additionally, the trustee must use the trust funds exclusively for the beneficiary's supplemental needs, which could encompass education, transportation, recreation, therapy, and other expenses that enhance the beneficiary's quality of life. When considering establishing a Texas Supplemental Needs Trust for Third Party — Disabled Beneficiary, consulting with an experienced attorney specializing in special needs planning is essential. They can provide comprehensive guidance, ensure compliance with legal requirements, and develop a tailored trust structure that maximizes the beneficiary's financial security and enhances their overall well-being.
