Third-Party Special Needs Trusts, Uniform Trust Code, and Disability Planning

Randy Drewett (Attorney at Law, Randy Drewett, PC.) has recently published his article entitled SNTs in a UTC Environment: Is Third-Party Disability Planning at Risk? 71 Tex. B.J. 114 (2007).

Here is an excerpt from his article:

Third-party special needs trusts (SNTs) are used by disability planning attorneys to assist clients in acquiring or maintaining public benefits that would otherwise be denied if the beneficiary owned — or could access — his or her assets outright, in the beneficiary’s individual capacity. SNTs are used to define or limit both countable income and countable resources for public benefits eligibility. If an applicant receives too much income or owns assets of too much value, that individual will not qualify for the public benefit program. Proper use of SNTs allows resources to be categorized as “non-countable” or “unavailable” when the same income or resources would otherwise disqualify the individual from receiving benefits. Any new law, or set of laws, that would redefine the corpus of an SNT as “available” would have a disastrous effect on traditional third-party disability planning.***