For Special Needs Trusts, as usual, the answer is, it depends.
Special Needs Trusts (SNTs) are a way to save money for disabled persons that do not risk a person’s eligibility for government funded programs, such as Medicaid and Supplemental Security Income (SSI). There are three (3) types of Special Needs Trusts. They are:
- Self-Settled Special Needs Trust
- Third-Party Special Needs Trust and
- Pooled Special Needs Trust
A self-settled SNT, also known as a d(4)(a) trust, is established with assets that belong to the beneficiary. A self-settled trust must be created and funded before the beneficiary turns age sixty-five (65).
A third-party SNT is established usually by a family member for the benefit of the beneficiary with assets of the family member. There are no age restrictions for a third-party SNT.
A Pooled SNT, also known as a d(4)(c) trust, can be established by a beneficiary or a family member for the benefit of the beneficiary. A Pooled SNT is managed by a nonprofit association. Generally, there are no age limitations for a Pooled SNT. However, this can be overruled by individual state regulations which may impose penalties if funded after age sixty-five (65). So, if considering a Pooled SNT, always check with a special needs attorney in your state.