Special Needs Trust - Arkansas

SPECIAL NEEDS TRUST AGREEMENT

Arkansas third-party irrevocable trust

This Special Needs Trust Agreement is made on [__/__/____] by [SETTLOR FULL NAME], of [ADDRESS] (Settlor), and [INITIAL TRUSTEE FULL NAME], of [ADDRESS] (Trustee), for [BENEFICIARY FULL NAME], born [__/__/____] (Beneficiary).

1. Creation and purpose

Settlor now transfers the property identified on Schedule A to Trustee, who accepts it to hold as the [BENEFICIARY FULL NAME] Special Needs Trust. This trust is irrevocable. Trustee shall hold and administer its property for Beneficiary during Beneficiary's life and distribute the remainder under Section 8. No person is entitled to a distribution merely by asking for one.

The trust is intended to supplement Beneficiary's care, comfort, education, health, transportation, recreation, and quality of life. Trustee shall consider the effect of each proposed payment on Beneficiary's public benefits, but this agreement does not guarantee eligibility or any particular benefits result.

2. Third-party property only

Trustee may accept later gifts or bequests from Settlor or other persons, provided the contributed property has never belonged to Beneficiary or Beneficiary's spouse. Trustee shall reject and return any proposed contribution belonging to either of them; this agreement does not create a first-party subtrust. Trustee shall keep records identifying each contribution and its source. No Medicaid reimbursement to a state is directed merely because Beneficiary dies; Trustee shall still satisfy any claim legally payable from this trust.

3. Distributions during Beneficiary's life

Trustee may distribute income or principal, or pay a provider directly, in amounts Trustee determines appropriate for Beneficiary's supplemental needs. Trustee shall act in good faith for the purposes of this trust and consider available benefits, actual needs, applicable program rules, and the likely effect of a payment. Trustee may decline a payment that would unnecessarily reduce benefits, but may make it when Beneficiary's welfare justifies the effect. Trustee may pay for housing or food after considering any resulting benefits reduction. Trustee shall not hand Beneficiary an enforceable right to demand cash or compel a distribution.

4. Spendthrift restriction

Before actual receipt, each beneficiary's interest is held subject to a spendthrift trust: the beneficiary may not voluntarily transfer it, and an involuntary transfer or creditor claim against it is barred to the extent Arkansas law permits. This restriction does not displace statutory exceptions or the Trustee's duty to administer the trust.

5. Trustee administration and records

Trustee may hold, invest, reinvest, sell, lease, insure, and manage trust property, retain appropriate advisers, and make the distributions authorized here, subject to Arkansas fiduciary duties. Trustee shall keep trust property separate, maintain records of receipts, disbursements, assets, liabilities, and compensation, and use trust property only for trust purposes. Trustee may receive reasonable compensation of [RATE OR METHOD] and reimbursement of reasonable administration expenses.

Trustee shall provide the acceptance and irrevocable-trust notices required by Ark. Code Ann. § 28-73-813(b), including the required 60-day notices to qualified beneficiaries. Trustee shall promptly furnish a beneficiary a copy of this instrument on request, keep qualified beneficiaries reasonably informed, and provide at least annual and termination reports to permissible distributees and other beneficiaries who request them, as required by § 28-73-813(c). Trustee shall respond to other information requests as that section requires.

6. Successor trustees

If Trustee cannot or will not serve, [FIRST SUCCESSOR FULL NAME AND ADDRESS] shall serve; if that person cannot or will not serve, [SECOND SUCCESSOR FULL NAME AND ADDRESS] shall serve. A successor accepts by signing a written acceptance and receiving the trust records and property. If neither named successor serves, a vacancy shall be filled under Ark. Code Ann. § 28-73-704. A departing Trustee shall deliver records and property to the successor and provide any report required upon vacancy.

7. Modification and disputes

This trust is irrevocable, but interested persons may use an Arkansas nonjudicial settlement agreement when § 28-73-111 permits it. An agreement must not violate a material purpose and may contain only terms a court could properly approve. Trustee or another interested person may seek appropriate judicial relief under Arkansas law. Nothing here excuses a breach of trust, imposes an arbitration requirement, or limits a breaching Trustee's liability to trust property.

8. Beneficiary's death and remainder

At Beneficiary's death, Trustee shall pay properly payable trust expenses and taxes, then distribute 100% of the balance to [PRIMARY REMAINDER BENEFICIARY FULL NAME, ADDRESS, AND RELATIONSHIP]. If that person does not survive Beneficiary, distribute 100% to [ALTERNATE REMAINDER BENEFICIARY FULL NAME, ADDRESS, AND RELATIONSHIP]. If neither survives, distribute 100% to [NAMED CHARITY, ADDRESS, AND EIN]; if that charity no longer exists, distribute to a substantially similar charity selected by Trustee. Trustee shall issue a final report and close the trust after completing distributions.

9. Governing law

Arkansas law governs the validity and administration of this trust, subject to applicable federal benefits law. If a provision cannot be enforced, the remaining provisions continue to the extent lawful and consistent with the trust's purposes.

Schedule A — Property transferred now

Settlor confirms that the property listed above belongs to Settlor, and Trustee acknowledges receipt of the listed property or its separate transfer instrument.

Signatures

Settlor: ______________________________ Date: [__/__/____]

Printed name: [SETTLOR FULL NAME]

Trustee acceptance: ______________________________ Date: [__/__/____]

Printed name: [INITIAL TRUSTEE FULL NAME]