Special Needs Trust Clause
(Trust)

Summary

This clause is a special needs trust clause for use in an underlying trust to preserve a disabled individual's eligibility for public assistance programs while providing them with additional funds that supplement governmental assistance. It is non-jurisdictional and can be adapted for use in your state. This clause includes practical guidance, drafting notes, and optional clauses. Trusts are generally governed by state law. Many states have adopted some version of the Uniform Trust Code (UTC), a uniform act promulgated by the Uniform Law Commission to provide uniformity to the law of trusts throughout the United States. Thus, this clause's drafting notes mainly refer to related laws under the UTC. The UTC provides that a trust may be created by written instrument. Unif. Tr. Code § 401. The terms of the special needs trust set forth within the trust can override many default rules in each state. However, certain state trust laws are mandated by statute and cannot be altered by contrary language. For example, for states that follow the UTC, the power of the court to modify or terminate a trust under certain circumstances may not be altered. Unif. Tr. Code § 105(b)(4). Practitioners should refer to the trust laws in the applicable jurisdiction before drafting a special needs trust clause for clients. For additional information on trusts and special needs trusts, see Estate Planning Strategies and Devices and Special Needs Trusts and Taxes. For an in-depth discussion of trusts in general, see Characteristics and Uses of Trusts and Requirements and Restrictions on Trust Purposes and Administration. For a 50-state survey that includes information on state trust laws, see Trusts State Law Survey.