Special Needs Trust - Florida

FLORIDA SPECIAL NEEDS TRUST

(Third-Party “Supplemental Needs” Trust Form)

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Operative Provisions
4. Representations & Warranties
5. Covenants & Restrictions
6. Default & Remedies
7. Risk Allocation
8. Dispute Resolution
9. General Provisions
10. Execution Block

1. DOCUMENT HEADER

1.1 Trust Title

“[FULL TRUST NAME]” and hereinafter the “Trust.”

1.2 Declaration & Formation

This Trust Agreement (“Agreement”) is made and entered into as of [EFFECTIVE DATE] (the “Effective Date”) by [SETTLOR NAME] (“Settlor”), in consideration of the establishment of a supplemental needs trust for the exclusive benefit of [BENEFICIARY NAME] (“Beneficiary”), and is accepted by [TRUSTEE NAME] (“Trustee”).

1.3 Governing Law

This Trust shall be construed, enforced, and administered in accordance with the Florida Trust Code, Fla. Stat. ch. 736, and other applicable laws of the State of Florida (“Governing Law”).

1.4 Recitals

A. Beneficiary is [RELATIONSHIP TO SETTLOR] and has medically determinable disabilities rendering Beneficiary eligible or potentially eligible for needs-based government benefits, including Supplemental Security Income (“SSI”) and Medicaid.
B. Settlor desires to create a discretionary trust that supplements, and does not supplant, such benefits while preserving eligibility.
C. Trustee is willing to serve under the terms set forth herein.

2. DEFINITIONS

“Accountant” – An independent certified public accountant engaged by Trustee under § 5.3.

“Applicable Government Benefits” – SSI, Medicaid, and any comparable federal, state, or local means-tested program.

“County Probate Court” – The Circuit Court, Probate Division, in and for [COUNTY] County, Florida.

“Disability” – As defined in 42 U.S.C. § 1382c(a)(3).

“Discretionary Distribution” – A distribution made solely at Trustee’s unfettered discretion per § 3.2.

“Qualified Expenses” – Goods and services improving Beneficiary’s quality of life but not counted as “income” or “resources” under 20 C.F.R. §§ 416.1102–416.1208, including but not limited to recreation, education, adaptive equipment, and housing supplements.

“Special Needs” – Needs of Beneficiary not satisfied by Applicable Government Benefits.

“Trust Assets” – All property transferred to or acquired by the Trust, together with all substitutions, additions, and accumulations.

3. OPERATIVE PROVISIONS

3.1 Funding

3.1.1 Initial Corpus. Settlor hereby irrevocably transfers the property described in Schedule A to Trustee to constitute the initial Trust corpus.
3.1.2 Additional Contributions. Third parties may, with Trustee’s consent, transfer additional property to the Trust.
3.1.3 Homestead Caution. Settlor’s Florida homestead real property should NOT be transferred to this Trust without prior review by qualified Florida counsel. Under Fla. Const. art. X, § 4(c), a homestead is not subject to devise if the owner is survived by a spouse or minor child (except a devise to the spouse alone if there is no minor child), and Fla. Stat. § 732.4015(2)(b) treats a disposition of homestead property from a trust as a "devise" subject to the same constitutional restriction. Funding this Trust with homestead property that does not satisfy these requirements risks an invalid disposition that passes instead under Florida’s intestacy and homestead-descent statutes rather than as directed herein.

3.2 Distribution Standard

3.2.1 Sole Benefit Rule. All distributions must be for the sole benefit of Beneficiary.
3.2.2 Pure Discretion. Trustee shall have absolute and sole discretion to make or withhold Discretionary Distributions of income and principal for Beneficiary’s Special Needs. Beneficiary shall have no right to compel distributions.
3.2.3 Government-Benefit Preservation. Trustee shall manage and time all distributions to avoid disqualifying Beneficiary from Applicable Government Benefits. Trustee may pay for Qualified Expenses directly to providers to minimize “in-kind support and maintenance.”

3.3 Spendthrift & Non-Assignment

Pursuant to Fla. Stat. § 736.0502, Trust Assets and Beneficiary’s interest therein are subject to a spendthrift provision. No interest hereunder shall be transferable or subject to creditor claims, including governmental claims except as expressly required by law.

3.4 Trust Termination

3.4.1 Termination Events. The Trust shall terminate on the earliest of:
(a) Beneficiary’s death;
(b) Exhaustion of Trust Assets; or
(c) Court order under Fla. Stat. § 736.04113.
3.4.2 Remainder. Upon termination, remaining Trust Assets shall be distributed to [REMAINDER BENEFICIARIES], free of trust and without Medicaid pay-back obligations (third-party SNT).

3.5 Accounting & Reporting

(a) Annual Accounts. Trustee shall deliver to Beneficiary (or court-appointed guardian) an annual written account per Fla. Stat. § 736.08135.
(b) Government Agency Reports. Trustee shall comply with any reporting required by the Social Security Administration (“SSA”) or the Florida Agency for Health Care Administration (“AHCA”).

3.6 Trustee Compensation

Trustee is entitled to reasonable compensation under Fla. Stat. § 736.0708 or as otherwise agreed: [COMPENSATION SCHEDULE].

4. REPRESENTATIONS & WARRANTIES

4.1 Settlor represents that all property transferred is non-marital and free of encumbrances.
4.2 Trustee represents that it has accepted the trusteeship in accordance with Fla. Stat. § 736.0701, is willing to serve, and is not disqualified from serving by the terms of this Agreement.
4.3 Beneficiary’s Disability. Settlor warrants Beneficiary meets, or is expected to meet, the Disability definition.
4.4 Survival. All representations and warranties survive execution and funding.

5. COVENANTS & RESTRICTIONS

5.1 Compliance Covenant. Trustee shall administer the Trust in strict conformity with:
(a) Fla. Stat. ch. 736;
(b) 42 U.S.C. § 1396p and related Medicaid regulations; and
(c) SSA Program Operations Manual System (POMS) guidelines.

5.2 Notice of Benefit Changes. Beneficiary (or guardian) shall notify Trustee within ten (10) days of any change in eligibility status for Applicable Government Benefits.

5.3 Tax Compliance. Trustee shall engage an Accountant to prepare all required fiduciary returns (IRS Form 1041) and issue K-1s to remainder beneficiaries if required.

6. DEFAULT & REMEDIES

6.1 Events of Default. Any of the following constitutes an “Event of Default”:
(a) Trustee’s breach of fiduciary duty;
(b) Trustee insolvency;
(c) Trustee failure to maintain a surety bond if required;
(d) Trustee resignation without thirty (30) days’ notice absent court approval.

6.2 Cure Period. Trustee shall have thirty (30) days after written notice to cure any Event of Default, except breaches involving fraud, willful misconduct, or misapplication of Trust Assets which are incurable.

6.3 Remedies. Upon default:
(a) Beneficiary or Settlor may petition the County Probate Court for removal and appointment of a successor trustee;
(b) Court may impose surcharges limited to Trust Assets;
(c) Injunctive relief is expressly preserved under § 8.3.

6.4 Attorneys’ Fees. Reasonable attorneys’ fees and costs incurred enforcing this Agreement shall be paid from Trust Assets, subject to court approval.

7. RISK ALLOCATION

7.1 Trustee Indemnification

Trustee, and its officers, directors, and agents, shall be indemnified and held harmless out of Trust Assets from all claims, liabilities, and expenses arising out of administration of the Trust, except to the extent caused by Trustee’s gross negligence, willful misconduct, or fraud.

7.2 Limitation of Liability

Trustee’s liability to any person shall in no event exceed the value of Trust Assets under Trustee’s control at the time liability is determined. No personal liability shall attach to Trustee.

7.3 Insurance

Trustee may purchase liability insurance payable from Trust Assets.

7.4 Force Majeure

Trustee shall not be liable for failure to act due to events beyond its reasonable control, including natural disasters, governmental restrictions, or systemic banking failures.

8. DISPUTE RESOLUTION

8.1 Governing Law

This Agreement is governed by the laws of the State of Florida, without regard to conflict-of-laws principles.

8.2 Forum Selection

Exclusive jurisdiction and venue lie in the County Probate Court.

8.3 Limited Arbitration

Disputes not involving: (i) removal of Trustee, (ii) construction of trust terms, or (iii) petitions to terminate the Trust under Fla. Stat. § 736.04113(2)(b) or to modify the Trust under Fla. Stat. § 736.04115, shall be submitted to binding arbitration administered by [ARBITRATION BODY] under its then-current rules. Arbitration awards are enforceable in the County Probate Court.

8.4 Injunctive Relief

Nothing herein limits the right of any party to seek injunctive, declaratory, or other equitable relief in the County Probate Court concerning trust enforcement.

8.5 Jury Trial Waiver

To the extent permitted in probate proceedings, the parties knowingly waive any right to a jury trial.

9. GENERAL PROVISIONS

9.1 Amendment & Reformation. The Trust is irrevocable; provided, however, that Trustee and Beneficiary (if competent) may petition the County Probate Court for modification to comply with changes in federal or state benefit laws.

9.2 Successors & Assigns. Provisions herein bind and inure to the benefit of successor trustees and remainder beneficiaries.

9.3 Severability. If any provision is held unenforceable, the remaining provisions remain in full force and the court shall reform the Trust to effectuate intent.

9.4 Entire Agreement. This instrument, together with Schedule A (Funding) and Schedule B (Successor Trustee Acceptance), constitutes the entire agreement.

9.5 Counterparts & Electronic Signatures. This Agreement may be executed in counterparts and via electronic signature, each of which is deemed an original.

10. EXECUTION BLOCK

IN WITNESS WHEREOF, the Settlor and Trustee have executed this Agreement as of the Effective Date.

10.1 Settlor

_____________________________
[SETTLOR NAME], Settlor

Date: _______________________

10.2 Trustee

_____________________________
[TRUSTEE NAME], Trustee

Date: _______________________

Witnesses

1. _____________________________ Date: ___________
2. _____________________________ Date: ___________

Notary Acknowledgment

State of Florida )
County of [________________________________] )

The foregoing instrument was acknowledged before me this ___ day of __________, 20__, by [SETTLOR NAME] and [TRUSTEE NAME] who are personally known to me or who produced __________________ as identification.

_____________________________
Notary Public, State of Florida
(NOTARIAL SEAL)

Schedule A – Initial Funding

[Detailed description of cash, securities, life-insurance proceeds, or other property transferred. Do not list Settlor's Florida homestead real property here without first confirming compliance with the homestead-devise restrictions in Fla. Const. art. X, § 4(c) and Fla. Stat. § 732.4015 — see § 3.1.3.]

Schedule B – Successor Trustee Acceptance

The undersigned Successor Trustee(s) hereby accept appointment under the foregoing Trust:

_____________________________
[SUCCESSOR TRUSTEE NAME]

Date: _______________________