SPECIAL NEEDS TRUST AGREEMENT

(Third-Party, Irrevocable – Kansas)

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Operative Provisions
   3.1 Creation and Funding
   3.2 Appointment and Acceptance of Trustee
   3.3 Beneficiary Designation
   3.4 Distributions; Supplemental Needs Standard
   3.5 Spendthrift and Government Benefit Protection
4. Representations & Warranties
5. Covenants & Restrictions
6. Default & Remedies
7. Risk Allocation
8. Dispute Resolution
9. General Provisions
10. Execution Block

[// GUIDANCE: The Table of Contents auto-updates in most word processors. Verify numbering after final edits.]

1. DOCUMENT HEADER

This SPECIAL NEEDS TRUST AGREEMENT (“Trust Agreement”) is made effective as of [EFFECTIVE DATE] (the “Effective Date”), by and among:

• [SETTLOR NAME(S)], of [SETTLOR ADDRESS] (“Settlor”);
• [INITIAL TRUSTEE NAME], of [TRUSTEE ADDRESS] (“Trustee”); and
• [BENEFICIARY NAME], a person with a disability as defined below (“Beneficiary”).

Recitals

A. Settlor desires to establish an irrevocable trust under the Kansas Uniform Trust Code, K.S.A. 58a-101 et seq. (the “KUTC”) for the sole benefit of Beneficiary.
B. Settlor’s purpose is to supplement, and not supplant, Beneficiary’s eligibility for means-tested government benefits, including Supplemental Security Income (“SSI”) and Medicaid.
C. Trustee is willing to accept the trusteeship and to hold and administer all property transferred to the trust in accordance with the terms herein.

NOW, THEREFORE, in consideration of the mutual covenants and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Settlor hereby declares, and Trustee hereby accepts, the following trust:

2. DEFINITIONS

Unless the context requires otherwise, the following capitalized terms have the meanings set forth below. Defined terms are used throughout this Trust Agreement.

“Accounting Period” – Each calendar year ending December 31, or such shorter period that ends on the termination of the Trust or a change of Trustee.

“Applicable Law” – All federal and Kansas statutes, regulations, and judicial doctrines governing special needs trusts, including without limitation the KUTC and 42 U.S.C. § 1396p.

“Beneficiary” – [BENEFICIARY NAME], the individual with a disability for whose sole benefit this Trust is created, and who meets the eligibility criteria for means-tested government benefits.

“Distribution Adviser” – Any person or committee appointed under Section 5.6, if applicable.

“Government Benefits” – SSI, Medicaid, Section 8 housing, SNAP, and any other means-tested federal or state assistance programs.

“Protected Asset(s)” – All property, real or personal, tangible or intangible, at any time held in this Trust, and all proceeds and reinvestments thereof.

“Supplemental Needs” – Goods and services that enhance Beneficiary’s quality of life but are not covered (or are insufficiently covered) by Government Benefits, including but not limited to medical equipment, therapies, transportation, education, recreation, and personal care items.

“Trust” – The trust created by this Trust Agreement, known as “[BENEFICIARY NAME] SPECIAL NEEDS TRUST.”

“Trustee” – The person(s) or entity(ies) serving from time to time pursuant to Section 5.2.

[// GUIDANCE: Add additional defined terms alphabetically as needed for bespoke drafting.]

3. OPERATIVE PROVISIONS

3.1 Creation and Funding

3.1.1 Irrevocable Trust. This Trust is irrevocable. Except as expressly permitted under Section 6.4 (Termination), Settlor shall have no right or power, whether alone or in conjunction with others, to alter, amend, revoke, or terminate the Trust, nor to direct the disposition of Trust income or principal.

3.1.2 Initial Funding. Concurrently with execution, Settlor is transferring to Trustee the property described in Schedule A (the “Initial Corpus”). The Trustee shall hold the Initial Corpus, together with all subsequent additions (collectively, the “Trust Estate”), for the uses and purposes set forth herein.

3.1.3 Additional Contributions. With Trustee’s consent, any person other than Beneficiary may, during Settlor’s lifetime or by testamentary disposition, transfer additional assets to the Trust, provided such assets are acceptable to Trustee and consistent with maintaining Beneficiary’s eligibility for Government Benefits.

[// GUIDANCE: For FIRST-PARTY SNT funding (i.e., Beneficiary’s own assets), insert payback language in Section 6.4 and revise this subsection to reflect 42 U.S.C. § 1396p(d)(4)(A) requirements.]

3.2 Appointment and Acceptance of Trustee

(a) Trustee Acceptance. By signing below, Trustee accepts the trusteeship and agrees to administer the Trust in accordance with this Trust Agreement and Applicable Law.
(b) Successor Trustees. Successor Trustees may be appointed pursuant to Section 5.3.

3.3 Beneficiary Designation

The Beneficiary is [BENEFICIARY NAME], Social Security Number ending in [XXX-XX-____]. No other person shall be deemed a beneficiary under this Trust during Beneficiary’s lifetime.

3.4 Distributions; Supplemental Needs Standard

(a) Sole Benefit. All distributions shall be for the sole benefit of Beneficiary.
(b) Discretionary Standard. Trustee shall have sole and absolute discretion to distribute income and/or principal for the Supplemental Needs of Beneficiary. Beneficiary shall have no right to compel distributions.
(c) Prohibition on Support Obligations. No distribution shall be made that would be counted as income or a resource to Beneficiary for purposes of Government Benefits, unless Trustee, after consulting qualified benefits counsel, determines that such distribution is in Beneficiary’s best interest notwithstanding any potential reduction in benefits.
(d) Prioritization of Non-Countable Expenses. Trustee shall, wherever practicable, pay vendors directly for goods and services rather than distributing cash to Beneficiary.

3.5 Spendthrift and Government Benefit Protection

(a) Spendthrift Clause. Pursuant to K.S.A. 58a-502, all interests of Beneficiary in the Trust are held subject to a spendthrift trust. No interest shall be transferable, assignable, pledgeable, or subject to the claims of Beneficiary’s creditors.
(b) No Contribution by Beneficiary. Beneficiary shall make no contributions to this Trust.

4. REPRESENTATIONS & WARRANTIES

4.1 Settlor’s Representations. Settlor represents and warrants that:
(a) Settlor has full legal capacity and authority to establish this Trust and to transfer the assets listed on Schedule A;
(b) Assets transferred are free of liens, encumbrances, and adverse claims, except as disclosed on Schedule A; and
(c) Settlement of this Trust is not intended to hinder, delay, or defraud any creditor.

4.2 Trustee’s Representations. Trustee represents and warrants that Trustee:
(a) Is qualified and willing to serve as Trustee under Applicable Law;
(b) Shall administer the Trust in good faith, with reasonable care, skill, and caution; and
(c) Shall comply with the prudent investor rule as codified at K.S.A. 58a-804, except as expressly modified herein.

4.3 Survival. All representations and warranties survive execution and remain in effect for the duration of the Trust.

5. COVENANTS & RESTRICTIONS

5.1 Trustee’s Affirmative Duties

(a) Record-Keeping and Accountings. Trustee shall maintain complete and accurate books and records and shall provide annual accountings to Beneficiary’s legal representative and to any court of competent jurisdiction upon request.
(b) Tax Compliance. Trustee shall file all required federal and state fiduciary tax returns.
(c) Benefits Monitoring. Trustee shall monitor Beneficiary’s eligibility for Government Benefits and consult with qualified counsel as needed.

5.2 Trustee’s Negative Covenants

(a) Self-Dealing. Trustee shall not engage in any transaction that constitutes self-dealing under K.S.A. 58a-802, except as expressly authorized by court order.
(b) Commingling. Trustee shall keep Trust assets segregated from non-trust assets.
(c) Loans to Beneficiary. Trustee shall not lend Trust assets to Beneficiary or to any person obligated to support Beneficiary.

5.3 Successor Trustee Provisions

(a) Order of Succession. If the office of Trustee becomes vacant, [SUCCESSOR TRUSTEE NAME] shall serve. If [SUCCESSOR TRUSTEE NAME] is unwilling or unable, then [ALTERNATE SUCCESSOR TRUSTEE NAME] shall serve.
(b) Court Appointment. If no named successor is able or willing, any interested party may petition the [COUNTY] Probate Division of the District Court of Kansas for appointment of a qualified trustee.
(c) Multiple Trustees. Co-Trustees shall act unanimously unless otherwise specified in a written agreement executed by all Co-Trustees.

5.4 Bond Requirement

Trustee shall be exempt from posting bond unless (i) required by the probate court, or (ii) requested in writing by a majority of the permissible distributees.

5.5 Compensation

Trustee is entitled to reasonable compensation in accordance with Kansas law and prevailing fiduciary fee schedules, payable quarterly in arrears.

5.6 Distribution Adviser (Optional)

Settlor may, by separate instrument, appoint a Distribution Adviser whose written recommendations shall be advisory and non-binding on Trustee.

6. DEFAULT & REMEDIES

6.1 Events of Default
Each of the following constitutes a “Default”:
(a) Trustee’s willful misconduct, gross negligence, or material breach of fiduciary duty;
(b) Failure to provide required accountings within thirty (30) days after written demand;
(c) Misappropriation or commingling of Trust assets; or
(d) Material violation of this Trust Agreement resulting in loss of Government Benefits.

6.2 Notice and Cure
Any qualified beneficiary (as defined by K.S.A. 58a-103) may serve written notice specifying the Default. Trustee shall have thirty (30) days to cure, unless the Default is not susceptible to cure.

6.3 Remedies
If Trustee fails to cure within the applicable period, the beneficiaries (or the probate court sua sponte) may:
(a) Remove and replace Trustee;
(b) Surcharge Trustee to restore lost or misapplied Trust assets; and/or
(c) Seek injunctive relief to prevent further harm under Section 8.4.

6.4 Termination
(a) Termination During Beneficiary’s Lifetime. Trust may not be terminated while Beneficiary is living, except as authorized by court order and only if continued administration is impracticable or contrary to Beneficiary’s best interests.
(b) Termination Upon Beneficiary’s Death. Upon Beneficiary’s death, Trustee shall:
(i) Pay any outstanding qualified expenses of Beneficiary;
(ii) [OPTIONAL for FIRST-PARTY TRUST: Reimburse the Kansas Department of Health and Environment, or other applicable state agencies, up to the total Medicaid benefits paid on Beneficiary’s behalf, in accordance with 42 U.S.C. § 1396p(d)(4)(A)]; and
(iii) Distribute the remaining balance to the remainder beneficiaries named in Schedule B, or if none, to Settlor’s heirs at law, per stirpes.
(c) No Reversion to Settlor. Under no circumstances shall any assets revert to Settlor.

7. RISK ALLOCATION

7.1 Trustee Indemnification

To the fullest extent permitted by Applicable Law, Trustee shall be indemnified and held harmless out of the Trust Estate against all liabilities, costs, and expenses (including reasonable attorneys’ fees) arising from the administration of the Trust, except for liabilities resulting from Trustee’s willful misconduct or gross negligence.

7.2 Limitation of Liability

Trustee’s liability, in any capacity, is limited to the value of the Trust Estate, and no personal assets of Trustee shall be subject to claims relating to the Trust, except in cases of willful misconduct or gross negligence.

7.3 Insurance

Trustee may purchase fiduciary liability insurance using Trust assets, naming Trustee as insured and the Trust as additional insured.

7.4 Force Majeure

Trustee shall not be liable for delays or failures in performance caused by acts of God, governmental actions, pandemics, or other events beyond the Trustee’s reasonable control.

8. DISPUTE RESOLUTION

8.1 Governing Law

This Trust Agreement and all matters arising hereunder shall be governed by and construed in accordance with the laws of the State of Kansas, without regard to conflict-of-laws principles.

8.2 Forum Selection

Any proceeding relating to the Trust shall be brought exclusively in the Probate Division of the District Court of [COUNTY], Kansas (“State Probate Court”).

8.3 Limited Arbitration

Notwithstanding Section 8.2, disputes solely concerning the amount of Trustee’s compensation or the propriety of specific administrative expenses may, upon mutual written agreement, be submitted to binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules. The arbitrator’s fees shall be paid from the Trust Estate unless the arbitrator allocates such fees differently in the award.

8.4 Injunctive Relief

Nothing in this Section shall impair the probate court’s equitable jurisdiction to issue temporary, preliminary, or permanent injunctive relief to enforce the terms of this Trust.

8.5 Jury Waiver

Because probate matters in Kansas are heard without a jury, no party shall demand a jury trial on any issue triable to the court.

9. GENERAL PROVISIONS

9.1 Amendment and Waiver
This Trust is irrevocable and may not be amended except as expressly provided in Section 6.4 or by court order. No waiver of any provision shall be deemed a waiver of any other provision.

9.2 Assignment
Except as expressly permitted, no party may assign any rights or obligations under this Trust. This Trust shall be binding upon and inure to the benefit of the parties and their respective successors and assigns.

9.3 Severability
If any provision of this Trust is held invalid or unenforceable, the remaining provisions shall remain in full force and effect, and the invalid provision shall be reformed to the minimum extent necessary to comply with Applicable Law while effecting the original intent.

9.4 Entire Agreement
This Trust Agreement, together with Schedules A and B, constitutes the entire agreement of the parties with respect to the subject matter and supersedes all prior agreements, whether written or oral.

9.5 Counterparts; Electronic Signatures
This Trust may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument. Signatures exchanged via DocuSign, PDF, or other electronic means shall be deemed originals for all purposes.

9.6 Headings
Headings are for convenience only and shall not affect interpretation.

10. EXECUTION BLOCK

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

Settlor

[SETTLOR NAME]

Date: _________

Trustee

[TRUSTEE NAME], Trustee

Date: _________

Acknowledgment (Notary)

State of Kansas )
County of ______ ) ss.

On this _ day of _, 20__, before me, the undersigned, a Notary Public in and for said state, personally appeared [SETTLOR NAME] and [TRUSTEE NAME], known to me (or satisfactorily proven) to be the persons whose names are subscribed to the foregoing instrument, and acknowledged that they executed the same for the purposes therein contained.

Notary Public

My Commission Expires: ___

SCHEDULE A – INITIAL CORPUS

[Detailed list of assets, account numbers, custodians, approximate values]

SCHEDULE B – REMAINDER BENEFICIARIES

1. [NAME], [RELATIONSHIP], [PERCENTAGE]
2. [NAME], [RELATIONSHIP], [PERCENTAGE]

[// GUIDANCE: Confirm that remainder beneficiaries are not legally obligated to support Beneficiary; otherwise, consult benefits counsel.]

[// GUIDANCE:
1. Verify compliance with the latest Social Security Administration POMS and Kansas Medicaid policy before implementation.
2. For first-party SNTs, incorporate mandatory “payback” language and ensure the Beneficiary is under age 65 at creation.
3. Always re-title contributed assets and accounts in the name of the Trust exactly as set forth herein to preserve asset exclusion status.
4. Provide the final signed instrument to the applicable eligibility caseworker promptly to avoid benefit disruptions.]