Special Needs Trust - Massachusetts

MASSACHUSETTS THIRD-PARTY SPECIAL NEEDS TRUST AGREEMENT

This agreement is made on [__/__/____] by [SETTLOR FULL LEGAL NAME] of [ADDRESS] (Settlor) and [TRUSTEE FULL LEGAL NAME] of [ADDRESS] (Trustee). The Settlor is neither the beneficiary nor the beneficiary's spouse. The Settlor now delivers the cash in Schedule A to the Trustee, who accepts it as trust property. The Trustee is a person other than the Beneficiary.

1. Trust and beneficiary

The trust is named [TRUST NAME] Special Needs Trust. Its sole current beneficiary is [BENEFICIARY FULL LEGAL NAME], born [__/__/____], of [ADDRESS] (Beneficiary). The Trustee shall hold the delivered cash, later accepted additions, and their proceeds under this agreement. The Trustee's signed Schedule A receipt acknowledges delivery; listing another asset alone does not transfer its title.

The trust's purpose is to supplement the Beneficiary's care and quality of life while allowing the Trustee to consider means-tested benefits available to the Beneficiary. SSI has income and resource limits. This agreement promises no benefit eligibility or tax result.

2. Third-party funding and irrevocability

The Settlor retains no unilateral right to revoke or amend this trust and no right to a distribution. The Trustee may accept additions only from a person other than the Beneficiary or the Beneficiary's spouse, after documenting their source. The Trustee shall reject property owned by either of them and refer any proposed transfer of that property for separate legal review. This instrument creates no first-party trust or Medicaid repayment term.

Modification or termination may occur under applicable Massachusetts law. Under M.G.L. c. 203E, § 411(a), a proposed modification or termination based on consent of the Settlor and all beneficiaries requires a petition and court approval. Other statutory routes remain available.

3. Distributions during the Beneficiary's life

The Trustee may distribute income or principal in amounts the Trustee determines advisable in good faith for the Beneficiary's health, education, comfort, personal assistance, transportation, recreation, or other needs. The Trustee may pay a provider directly or purchase goods or services. Before paying cash to the Beneficiary or paying for shelter, the Trustee shall consider the likely effect under the Beneficiary's actual benefit programs and may seek advice from benefits counsel. For SSI, food provided directly to the Beneficiary has not counted as in-kind support and maintenance since September 30, 2024; cash or a gift card to buy food can count as unearned income. Other benefit programs may treat food differently. The Trustee may make a distribution despite a benefit reduction when the Trustee determines the Beneficiary's needs justify it.

No fixed amount is payable to the Beneficiary, and the Beneficiary has no power to direct or require a payment under this agreement. The Trustee's discretion remains subject to M.G.L. c. 203E, § 814 and other fiduciary duties. Undistributed income becomes principal.

4. Spendthrift protection

No beneficiary may voluntarily transfer an interest before receipt, and no creditor may involuntarily reach that interest before receipt, except as Massachusetts law permits. This provision does not override Article 5 of M.G.L. c. 203E or other applicable law.

5. Termination and complete remainder

This trust terminates on the Beneficiary's death or earlier exhaustion of its property. Following the Beneficiary's death, the Trustee shall pay lawful trust expenses and distribute 100% of the remaining trust property to [PRIMARY REMAINDER BENEFICIARY FULL LEGAL NAME] of [ADDRESS], if living or in existence. If that recipient cannot take, the Trustee shall distribute 100% to [ALTERNATE REMAINDER BENEFICIARY OR CHARITY FULL LEGAL NAME] of [ADDRESS]. Complete the alternate designation before signing. The Trustee may retain a reasonable reserve for final debts, expenses and taxes, then distribute any unused reserve under this Section.

6. Trustee administration and accounts

The Trustee shall administer the trust in good faith and with reasonable care, skill, and caution; keep adequate records; and separate trust property from personal property. Subject to fiduciary duties, the Trustee may retain, invest, sell, insure, and manage trust property, hire advisers, pay reasonable administration expenses, and exercise powers under M.G.L. c. 203E, § 815.

Within 30 days after accepting this irrevocable trust, the Trustee shall inform the qualified beneficiaries in writing of the Trustee's name and address, by delivery or ordinary first-class mail. The Trustee shall keep qualified beneficiaries reasonably informed and respond to their administration-information requests unless unreasonable in the circumstances. At least annually and at termination, the Trustee shall send an account to distributees and permissible distributees of income or principal and to other qualified beneficiaries who request it, as M.G.L. c. 203E, § 813 requires. The account shall identify property, liabilities, receipts, disbursements, compensation, assets and, if feasible, their values. A representative may receive information for the Beneficiary as applicable law provides.

7. Trustee succession

The Trustee may resign on at least 30 days' notice to qualified beneficiaries and cotrustees, or with court approval. The Settlor, a cotrustee, or a beneficiary may ask a court to remove a Trustee under M.G.L. c. 203E, § 706.

If the Trustee dies, resigns, becomes unable to serve, or is removed, [FIRST SUCCESSOR TRUSTEE FULL NAME] of [ADDRESS] shall serve. If unavailable, [SECOND SUCCESSOR TRUSTEE FULL NAME] of [ADDRESS] shall serve. If neither can serve and no cotrustee remains, a successor may be appointed by unanimous agreement of qualified beneficiaries, then by the court, under M.G.L. c. 203E, § 704(c). A successor shall sign a written acceptance and receive the trust property and records.

8. Liability and governing law

Massachusetts law governs this trust. No term excuses a breach committed in bad faith or with reckless indifference to the trust's purposes or beneficiaries' interests. Personal liability for administration torts and obligations arising from trust property is determined under M.G.L. c. 203E, § 1010, including personal fault. This agreement does not cap breach remedies at the trust property's value. Trust proceedings may be brought in a Massachusetts court having jurisdiction and venue under applicable law.

9. Signatures

The Settlor and Trustee intend this signed instrument and the delivered Schedule A cash to create this trust now.

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

Printed name: [SETTLOR FULL LEGAL NAME]

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

Printed name: [TRUSTEE FULL LEGAL NAME]

Schedule A — Initial trust property and receipt

Cash amount delivered to Trustee: $[AMOUNT]

Delivery method and date: [METHOD], [__/__/____]

Trust account or holding location: [ACCOUNT OR LOCATION]

The Trustee acknowledges actual receipt of the cash identified above as trust property.

Trustee receipt signature: ______________________________ Date: [__/__/____]