What special rules govern Self-Settled Special Needs Trusts?
Self-Settled Special Needs Trusts are much more complicated than Third-Party Special Needs Trusts. Typically, a Self-Settled Trust must comply with a federal law requiring that it be established by a judge, a court-appointed guardian or the parents or grandparents of the beneficiary. Social Security regulations often limit Trust creation to judges and court-appointed guardians. In addition, most Self-Settled Special Needs Trusts must include a provision that repays state Medicaid agencies for benefits upon termination of the trust – often called a “Payback” provision.
