MISSOURI SPECIAL NEEDS TRUST AGREEMENT
(Third-Party, Irrevocable - Draft Template)
[// GUIDANCE: This template is designed for Missouri counsel to customize for a third-party supplemental (special) needs trust intended to preserve the Beneficiary’s eligibility for means-tested government assistance programs such as SSI and Medicaid. All bracketed items must be completed and the document reviewed for client-specific facts, tax implications, and funding strategy.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Creation, Purpose, & Irrevocability
- Trust Estate & Funding Mechanisms
- Distribution Standards (Supplemental Needs)
- Spendthrift & Government Benefit Preservation
- Trustee Powers & Duties
- Accountings & Informational Rights
- Representations, Warranties, & Covenants
- Indemnification; Limitation of Liability
- Events of Default & Remedies
- Dispute Resolution & Forum Selection
- General Provisions
- Execution Block
1. DOCUMENT HEADER
1.1 Parties
This Missouri Special Needs Trust Agreement (“Trust Agreement”) is made as of [EFFECTIVE DATE] (the “Effective Date”) by and between:
a. [SETTLOR NAME], residing at [ADDRESS] (“Settlor”);
b. [TRUSTEE NAME], whose principal address is [ADDRESS] (“Trustee”); and
c. [BENEFICIARY NAME], date of birth [DOB], SSN -*-** (“Beneficiary”).
1.2 Recitals
A. Settlor desires to establish an irrevocable trust for the sole benefit of Beneficiary, who has special needs and is expected to remain eligible for Supplemental Security Income (“SSI”) and Medicaid.
B. It is Settlor’s intent that this Trust constitute a “supplemental needs trust” within the meaning of 42 U.S.C. § 1396p(d)(4)(A) and applicable Missouri law, and that Trust assets be used only to supplement, and not supplant, any governmental assistance.
C. Trustee is willing to serve pursuant to the terms herein.
NOW, THEREFORE, in consideration of the mutual covenants contained herein, Settlor hereby delivers to Trustee the property described in Schedule A (the “Initial Corpus”), to hold, manage, and distribute as follows.
2. DEFINITIONS
For ease of reference, capitalized terms are defined alphabetically below. Terms defined in this Section have the same meaning wherever used in this Trust Agreement.
“Accountings” – Section 8.1.
“Arbitrable Matter” – Section 12.3.
“Authorized Distributions” – Section 5.1.
“Beneficiary” – Section 1.1(c).
“Corpus” – All property held from time to time in the Trust, including income and capital gains.
“Default” – Section 11.1.
“Governing Law” – Missouri law applicable to trusts, excluding conflict-of-laws rules.
“Government Benefits” – Means-tested public assistance programs, including SSI and Medicaid.
“Protected Period” – Any period during which Beneficiary is eligible or potentially eligible for Government Benefits.
“Replacement Trustee” – Section 7.7.
“Settlor” – Section 1.1(a).
“Trust” or “Trust Estate” – The trust created by this Agreement, all property transferred to it, and all subsequent additions.
“Trustee” – Section 1.1(b) and any successor appointed under Section 7.7.
3. CREATION, PURPOSE, & IRREVOCABILITY
3.1 Creation. Settlor hereby creates the [NAME OF TRUST] (“Trust”) under Missouri law.
3.2 Irrevocability. This Trust is irrevocable. Settlor waives and relinquishes any right or power, whether alone or in conjunction with others, to alter, amend, revoke, or terminate the Trust, except as expressly permitted herein.
3.3 Special Needs Purpose. The primary purpose of this Trust is to enhance Beneficiary’s quality of life by providing goods and services not otherwise provided by Government Benefits, without jeopardizing Beneficiary’s eligibility for such benefits.
3.4 Governing Law & Situs. This Trust shall be governed by and construed in accordance with the laws of the State of Missouri (the “Governing Law”). The situs shall remain in Missouri unless relocated pursuant to Section 7.8.
4. TRUST ESTATE & FUNDING MECHANISMS
4.1 Initial Corpus. The Initial Corpus is set forth in Schedule A. Additional assets may be added at any time by Settlor or other persons, subject to Trustee’s written consent.
4.2 Separate Accounting of Additions. Contributions made by any person other than Settlor shall be separately accounted for upon request, but commingled for investment unless segregated assets are required to preserve Government Benefits.
4.3 No Beneficiary Contributions. Under no circumstances may Beneficiary contribute his or her own assets to this Trust.
5. DISTRIBUTION STANDARDS (SUPPLEMENTAL NEEDS)
5.1 Authorized Distributions. During Beneficiary’s lifetime, Trustee may, in Trustee’s sole and absolute discretion, make distributions of income and/or principal for Beneficiary’s supplemental needs, including but not limited to:
a. medical, dental, vision, and mental health services or equipment not covered by Government Benefits;
b. education, training, and habilitation programs;
c. adaptive devices, transportation, and travel;
d. recreational, cultural, or social activities;
e. personal care attendants or companion services; and
f. other goods or services reasonably intended to improve Beneficiary’s quality of life.
5.2 Prohibition on Basic Support. Trustee shall not provide food, shelter, or other items considered “in-kind support and maintenance” under SSI regulations unless Trustee, after consulting qualified counsel, determines that such distribution is in Beneficiary’s best interests and acceptable under prevailing benefits rules.
5.3 No Demand Right. Beneficiary lacks any legal or equitable right to compel distributions; the Trust is purely discretionary.
5.4 Third-Party Payment. Where practicable, Trustee shall pay vendors directly rather than distributing cash to Beneficiary.
6. SPENDTHRIFT & GOVERNMENT BENEFIT PRESERVATION
6.1 Spendthrift Clause. To the maximum extent permitted by Governing Law, the interest of Beneficiary in the Trust Estate shall not be subject to voluntary or involuntary transfer, assignment, pledge, or seizure by creditors.
6.2 Medicaid Payback Waiver. Because this is a third-party trust, no Medicaid payback provision shall apply.
6.3 Notice to Agencies. Trustee shall provide agencies administering Government Benefits such notices or accountings as required by law.
7. TRUSTEE POWERS & DUTIES
7.1 Fiduciary Standard. Trustee shall perform all duties hereunder with the care, skill, and prudence of a prudent person familiar with special needs trusts.
7.2 Enumerated Powers. Subject to Sections 5 and 6, Trustee may:
a. retain, sell, exchange, or reinvest Trust assets;
b. open accounts, hold securities in nominee name, and employ custodians;
c. compromise, arbitrate, or litigate claims;
d. borrow funds and encumber Trust assets limited to Trust liability;
e. employ professionals (e.g., attorneys, CPAs, care managers) and pay their reasonable fees; and
f. execute all documents reasonably necessary to administer the Trust.
7.3 Duty to Monitor Benefits. Trustee shall remain informed of eligibility requirements for Government Benefits affecting Beneficiary.
7.4 Bond. [INSERT “Trustee shall be exempt from bond.” -OR- “Trustee shall post a fiduciary bond in the amount of $____, premium payable from the Trust.”]
7.5 Compensation. Trustee is entitled to reasonable compensation in accordance with Missouri law or a separate written fee schedule.
7.6 Accountings. See Section 8.
7.7 Resignation & Removal.
a. Resignation. Trustee may resign upon ninety (90) days’ written notice to Settlor (if living), Beneficiary’s legal representative, and the Missouri probate court having jurisdiction.
b. Removal. Settlor (if living) or, after Settlor’s death, a majority of the adult remainder beneficiaries may remove Trustee on thirty (30) days’ written notice for cause (including incapacity, breach of fiduciary duty, or persistent failure to act).
c. Replacement Trustee. A Replacement Trustee shall be appointed within sixty (60) days by (i) Settlor, if living; otherwise (ii) a majority of adult remainder beneficiaries; or (iii) the probate court if none of the foregoing act.
7.8 Change of Situs. With advance written notice to Beneficiary’s legal representative, Trustee may transfer the situs if advisable to preserve Government Benefits or improve Trust administration, provided Missouri law continues to govern.
8. ACCOUNTINGS & INFORMATIONAL RIGHTS
8.1 Annual Accountings. Trustee shall provide annual written Accountings to Beneficiary’s legal representative and any court as required.
8.2 Inspection. Beneficiary’s legal representative may, upon reasonable request, inspect Trust records during normal business hours.
9. REPRESENTATIONS, WARRANTIES, & COVENANTS
9.1 Settlor’s Representations. Settlor represents that:
a. Settlor has full legal authority to transfer the assets comprising the Corpus;
b. no asset transferred is subject to undisclosed liens or claims; and
c. establishment of this Trust does not violate any court order or contractual obligation.
9.2 Trustee’s Covenants. Trustee covenants to:
a. administer the Trust in strict accordance with this Agreement and Governing Law;
b. maintain the Trust’s exemption from Medicaid spend-down and asset availability rules; and
c. promptly notify Beneficiary’s legal representative of any event that may adversely affect Government Benefits.
9.3 Survival. The representations and covenants in this Section survive execution and remain in effect throughout Trust administration.
10. INDEMNIFICATION; LIMITATION OF LIABILITY
10.1 Trustee Indemnity. Trustee and its officers, directors, employees, and agents (collectively, “Indemnified Parties”) shall be indemnified and held harmless from the Trust Estate against any claim, liability, or expense, including reasonable attorneys’ fees, arising from the good-faith administration of the Trust, except to the extent resulting from the Indemnified Parties’ gross negligence, willful misconduct, or breach of fiduciary duty.
10.2 Liability Cap. Any liability of Trustee to Settlor, Beneficiary, or any other person is limited solely to the assets of the Trust Estate; no personal or extraneous assets of Trustee shall be reachable.
11. EVENTS OF DEFAULT & REMEDIES
11.1 Default. A “Default” occurs if Trustee (a) commits gross negligence or willful misconduct, (b) materially breaches this Agreement and fails to cure within thirty (30) days after written notice, or (c) is adjudicated insolvent.
11.2 Remedies. Upon Default, the probate court having jurisdiction may:
a. compel an accounting;
b. remove and replace Trustee;
c. surcharge Trustee to the extent of damages; and/or
d. grant such equitable relief as is just and proper, including injunctive relief.
11.3 Attorneys’ Fees. The prevailing party in any action to enforce this Agreement is entitled to reasonable attorneys’ fees and costs, payable from the Trust Estate unless the court orders otherwise.
12. DISPUTE RESOLUTION & FORUM SELECTION
12.1 Governing Law. This Agreement is governed by the laws of the State of Missouri without regard to conflict-of-laws principles.
12.2 Probate Court Jurisdiction. Exclusive jurisdiction for matters relating to construction or administration of the Trust lies in the [NAME OF COUNTY] Probate Division of the Circuit Court of Missouri.
12.3 Limited Arbitration. Notwithstanding Section 12.2, disputes solely concerning Trustee compensation, investment performance, or routine accounting (“Arbitrable Matters”) shall be submitted to confidential, binding arbitration in [CITY, MO] administered by the American Arbitration Association under its Commercial Arbitration Rules. The arbitrator’s award shall be enforceable in the probate court.
12.4 Injunctive Relief. Nothing herein limits the probate court’s power to issue temporary, preliminary, or permanent injunctive relief to preserve the Trust Estate or protect Beneficiary.
12.5 No Jury Trial. All proceedings relating to the Trust shall be heard by the court without a jury as provided by Missouri probate practice.
13. GENERAL PROVISIONS
13.1 Amendments. This Agreement may be modified only (a) by court order if necessary to conform to changes in federal or Missouri law governing special needs trusts, or (b) by unanimous written consent of Settlor (if living), Trustee, and Beneficiary’s legal representative, and only if such amendment does not jeopardize Government Benefits.
13.2 Severability. Any provision held invalid shall be severed and the remainder given full effect consistent with the Trust’s purpose.
13.3 Successors & Assigns. The rights and obligations of Trustee shall inure to any successor Trustee. No other assignment is permitted.
13.4 Entire Agreement. This Trust Agreement, together with Schedule A and any joinder or appointment instruments, constitutes the entire agreement of the parties.
13.5 Counterparts; Electronic Signatures. This Agreement may be executed in any number of counterparts, each deemed an original, and delivered via electronic signature in compliance with the Missouri Uniform Electronic Transactions Act.
14. EXECUTION BLOCK
IN WITNESS WHEREOF, the parties execute this Missouri Special Needs Trust Agreement as of the Effective Date.
14.1 Settlor
[SETTLOR NAME], Settlor
14.2 Trustee
[TRUSTEE NAME], Trustee
14.3 Acknowledgment (Notary)
State of Missouri )
County of _____ ) ss.
On this ___ day of __, 20, before me, the undersigned Notary Public, 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.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
Notary Public
My Commission Expires: _____
[// GUIDANCE: Missouri does not require witnesses for an inter vivos trust, but local practice may vary. Add witness lines if desired.]
SCHEDULE A
(Initial Trust Corpus)
- Cash: $__ deposited to Account No. __ at ____ Bank.
- [Insert description of securities, life insurance policies, etc.]
[END OF DOCUMENT]