Can Someone Else Set Up the SNT?
While Special Needs Trusts (“SNT”) are often set up in special situations with the beneficiary’s own assets, called a “First-Party” or self-settled special needs trust, they are often established by others, commonly a parent or grandparent who is concerned about the special needs beneficiary. These SNTs are referred to as Third-Party Special Needs Trusts.
In contrast to First-Party SNTs, an SNT set up by a third-party can also have beneficiaries other than the disabled beneficiary. So, for example, you can designate to whom you want the trust assets to pass in the Third-Party SNT upon the primary beneficiary’s death. You do not want the trust to reimburse the state upon the beneficiary’s death, which the First-Party SNT must do.
There are still many restrictions that must be complied with in order to not lose important government benefits for the beneficiary. Because of the specialized nature of SNT, whether First-Party or Third-Party, and the importance of getting it right, it is important to have the trust drafted by an attorney.
If you have a loved one with special needs, please call to discuss how an SNT can make a difference in his or her life.