A first party Supplemental Needs Trust is created with the funds of a person with a disability under age 65, and would have a pay-back provision reimbursing the state at the beneficiary’s death for Medicaid assistance provided. A third party Supplemental Needs Trust created with funds of someone other than the beneficiary and does not have a pay-back provision. If advance planning was not done, and a person died leaving an inheritance for a disabled individual, a third party trust would no longer be an option, and the disabled individual may have no alternative other than funding a first party trust to preserve his government benefits.
By Esther Schwartz Zelmanovitz
