Special Needs Trust - Minnesota

MINNESOTA THIRD-PARTY SUPPLEMENTAL NEEDS TRUST

Trust name: [BENEFICIARY FULL NAME] Supplemental Needs Trust
Date: [__/__/____]

Complete before signing: Identify a beneficiary whose disability existed before this trust's creation, confirm actual initial property transfer in Schedule A, and complete the remainder shares and alternates in Schedule B. The beneficiary, the beneficiary's spouse, and anyone obligated under a settlement or judgment to pay the beneficiary must not fund this instrument. A separately titled asset may require a deed, assignment, or retitling. Eligibility for public benefits requires an individual program review; signing this trust alone does not establish eligibility.

1. Creation, beneficiary, and funding

I, [SETTLOR FULL NAME], of [ADDRESS], create this irrevocable trust by transferring the property described as presently delivered in Schedule A to [TRUSTEE FULL NAME], of [ADDRESS], as trustee. The trustee acknowledges receipt and accepts the trusteeship. Later property effectively transferred by a permitted third party becomes trust property. Minnesota law governs.

The sole current beneficiary is [BENEFICIARY FULL NAME], born [DATE], of [ADDRESS]. Before this trust was created, the beneficiary met the disability criteria of Title II or XVI of the Social Security Act, or the alternative condition in Minn. Stat. § 501C.1205, subd. 2(c), as documented by [IDENTIFY DETERMINATION OR TWO QUALIFIED WRITTEN PROFESSIONAL OPINIONS AND DATES]. Keep the documentation with the trust records.

No property of the beneficiary or beneficiary's spouse may enter this trust. The trustee must also refuse property from a person obligated to pay the beneficiary under a settlement agreement or judgment. This is a third-party trust; a proposed gift or recovery belonging to the beneficiary requires separate advice and a different instrument.

2. Irrevocability and purpose

This trust is irrevocable. I retain no unilateral power to amend, revoke, or withdraw its property. Its purpose is to supplement publicly funded benefits by paying for the beneficiary's reasonable living expenses and other needs when such benefits are insufficient, consistently with Minn. Stat. § 501C.1205, subd. 2. A lawful court order or statutory modification may still affect this trust.

3. Distributions

The trustee may distribute income or principal, in the trustee's discretion, for the beneficiary's supplemental needs. No distribution is mandatory. Payments may be made directly to a provider, or by another method that meets the restriction below. The trustee shall consider current benefit rules and may obtain advice from a qualified public-benefits adviser before a proposed distribution.

Mandatory restriction: The trustee shall make no disbursement that would replace, reduce, or substitute for publicly funded benefits otherwise available to the beneficiary or render the beneficiary ineligible for publicly funded benefits. The trustee has no “best interest” exception to this restriction. If the effect is uncertain, the trustee shall defer the payment pending a benefits review. The beneficiary cannot compel or direct a distribution or appoint trust property.

Trust property and income may be treated as available under the methodology of the applicable benefit program, as stated in Minn. Stat. § 501C.1205, subd. 2(f). The trustee shall keep records of the purpose, recipient, amount, and known benefit effect of each payment.

4. Spendthrift and administration

The beneficiary's interest is subject to a spendthrift restriction on both voluntary and involuntary transfers, to the extent allowed by Minn. Stat. § 501C.0502. The beneficiary may not assign, pledge, or encumber the interest, and a creditor may not reach it before the trustee makes a distribution to the beneficiary, subject to applicable law.

The trustee shall administer this trust in good faith and with reasonable care, skill, and caution. The trustee may hold, invest, insure, lease, sell, and manage trust property; employ advisers; pay proper trust expenses; and make distributions within this instrument's limits. The trustee shall maintain separate trust records, keep qualified beneficiaries reasonably informed as required by Minn. Stat. § 501C.0813, and give them an annual account of assets, receipts, disbursements, and compensation. Reasonable trustee compensation and proper expenses may be paid from trust property. No provision here excuses a breach of trust.

5. Trustee succession

If the 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 in a signed writing kept with the trust records. The outgoing trustee shall deliver the property and records to the successor. If both named successors are unavailable, fill the vacancy under Minn. Stat. § 501C.0704. A trustee may resign upon notice to the qualified beneficiaries, the living settlor, and all cotrustees, or with court approval, under § 501C.0705. A resignation does not release liability for earlier acts or omissions.

6. Death and remainder

This trust terminates upon the beneficiary's death. The trustee shall first pay proper trust expenses and enforceable obligations, then distribute the remaining property in the shares in Schedule B. Each share goes to its named recipient if living at the beneficiary's death, otherwise to that row's alternate. If neither survives, that share is divided proportionately among the other surviving recipients or alternates. If none survives, the entire remainder goes to [FINAL CONTINGENT RECIPIENT FULL NAME AND ADDRESS]. Shares in Schedule B must total 100%. The trustee may divide assets in kind using fair values and shall provide a final accounting.

Minn. Stat. § 501C.1205, subd. 2(e), states a specific post-age-64 institutional-residence condition under which a supplemental needs trust is unenforceable. That condition requires at least six months in a state institution or nursing facility and no reasonable expectation of discharge due to medical need for institutional care. The statute defines a reasonable expectation of discharge by the attending physician's certification that the expectation is reasonable; it does not require a physician's certification that discharge is unlikely. Participation in a group residential program alone does not trigger the condition. The trustee shall obtain legal advice if the condition may apply. It is not an automatic trustee power to terminate this instrument.

7. Signatures

I create this trust and transfer the initial property identified in Schedule A.

Settlor signature: ______________________________ Date: [__/__/____]
Printed name: [SETTLOR FULL NAME]

I acknowledge receipt of the initial property and accept this trusteeship.

Trustee signature: ______________________________ Date: [__/__/____]
Printed name: [TRUSTEE FULL NAME]

Schedule A — property actually transferred

The trustee shall retain evidence of each completed transfer. Do not list anticipated future gifts as already transferred.

Schedule B — remainder recipients