Special Needs Trust Information With Third Parties
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FAQ
While first-party special needs trusts and pooled trusts hold funds that belong to the person with special needs, third-party special needs trusts, as the name implies, are funded with assets that never belonged to the trust beneficiary, and they provide several advantages over the other two types of trusts.
Third-Party Special Needs Trusts are established using assets from someone other than the individual living with disabilities. Typically established by a loved one while living or through specific language in a living will specifically designating funds to be placed into a Third-Party Trust.
What is a Third Party Trust? A Third Party Trust (also known as a Common Law Trust) is funded by the beneficiary's family and/or friends, rather than the beneficiary themselves. It can be funded either during their lifetime and/or through an estate plan.
There are two types of special needs trusts, first-party and third-party. First-party means the disabled individual uses their own assets to fund the trust. Third-party means someone else establishes the trust with the disabled person as the beneficiary.