Special Needs Trust - Mississippi

MISSISSIPPI SPECIAL NEEDS TRUST AGREEMENT

(Draft Template – For Attorney Review & Customization)

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 Title and Parties

This Mississippi Special Needs Trust Agreement (the “Trust Agreement”) is made and entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and among:

a. [SETTLOR NAME], an individual residing at [ADDRESS] (“Settlor”);
b. [TRUSTEE NAME], [individual / corporate], having an address at [ADDRESS] (“Trustee”); and
c. [BENEFICIARY NAME], an individual with a disability within the meaning of 42 U.S.C. § 1382c(a)(3) (“Beneficiary”).

1.2 Recitals

A. Settlor desires to establish an irrevocable trust for the sole benefit of Beneficiary to supplement, and not supplant, any governmental benefits Beneficiary may receive.
B. Trustee is willing to hold, administer, and distribute the trust estate in accordance with the terms hereof.
C. The parties intend that this Trust qualify as a “special needs” or “supplemental needs” trust under applicable federal and Mississippi law — including the protection afforded by Miss. Code Ann. § 91-8-1109, which provides that no provision of the Mississippi Uniform Trust Code shall apply to a special needs trust, supplemental needs trust, or other similar trust for a disabled beneficiary (including a trust under 42 U.S.C. § 1396p(d)(4)(A) or (C)) to the extent that provision would disqualify the Beneficiary from eligibility for public needs-based assistance — so that trust assets are not considered “available resources” for means-tested benefit programs.

1.3 Governing Law and Forum

This Trust Agreement shall be governed by Mississippi law. Trust jurisdiction and venue are governed by Miss. Code Ann. §§ 91-8-201 to 91-8-204, including the statutory concurrent-jurisdiction provisions.

2. DEFINITIONS

For ease of reference, capitalized terms have the meanings set forth below. Terms defined elsewhere have the same meaning when used herein.

“Accounting Period” – Each calendar year ending December 31 or such other period selected by Trustee consistent with Section 5.4.

“Applicable Benefits” – Any present or future federal, state, or local means-tested assistance program, including without limitation Supplemental Security Income (“SSI”), Medicaid, SNAP, and HUD housing subsidies.

“Beneficiary” – The person identified in Section 1.1(c).

“Disability” – A physical or mental impairment meeting the definition under 42 U.S.C. § 1382c(a)(3) or successor statute.

“Discretionary Distribution” – A distribution of Income or Principal that Trustee, in its sole and absolute discretion, may make pursuant to Section 3.4.

“Income” and “Principal” – As defined in the Mississippi Principal and Income Act of 2013, Miss. Code Ann. § 91-17-101 et seq., unless Trustee elects otherwise under Section 3.10.

“Qualified Expenses” – Those goods and services that enhance Beneficiary’s quality of life but do not reduce or disqualify Beneficiary’s Applicable Benefits, including without limitation items listed in Section 3.5.

“Trust” – The trust created by this Trust Agreement.

“Trust Estate” – All property transferred to or acquired by the Trust and all accumulations thereon.

3. OPERATIVE PROVISIONS

3.1 Creation and Funding

The Trust is irrevocably created upon execution. Settlor hereby transfers to Trustee the property described in Schedule A attached hereto, receipt of which Trustee acknowledges. Additional property may be added at any time by Settlor or third parties, subject to Trustee’s acceptance.

3.2 Irrevocability

This Trust is irrevocable. Settlor, Beneficiary, or any other person shall have no power to alter, amend, revoke, or terminate the Trust except as expressly provided herein or by court order under Miss. Code Ann. §§ 91-8-411 through 91-8-416 (modification, reformation, and termination of trusts).

3.3 Spendthrift Protection

To the maximum extent permitted by Miss. Code Ann. § 91-8-502, the interest of Beneficiary in the Trust Estate shall not be subject to voluntary or involuntary transfer, assignment, pledge, or seizure by any creditor. In addition, to the extent any distribution to Beneficiary is discretionary, such interest is neither a property interest nor an enforceable right within the meaning of Miss. Code Ann. § 91-8-503, and no creditor or assignee of Beneficiary may compel Trustee to make, or reach, a discretionary distribution.

3.4 Discretionary Distributions

Trustee may, but shall not be required to, distribute such amounts of Income or Principal for the benefit of Beneficiary as Trustee determines, in Trustee’s sole and absolute discretion, to be advisable for Qualified Expenses, after considering other resources readily available to Beneficiary. No distribution shall be made that would:
a. Cause Beneficiary to become ineligible for Applicable Benefits; or
b. Supplant or replace publicly provided assistance.

3.5 Illustrative List of Qualified Expenses

Qualified Expenses may include: housing enhancements, adaptive equipment, personal care attendants, transportation, education, entertainment, travel, recreation, legal services, therapies, and other supplemental goods or services.

3.6 Prohibited Distributions

Trustee shall not:
a. Make cash distributions directly to Beneficiary;
b. Pay for basic shelter unless Trustee first obtains professional benefits counsel and documents compliance with SSI regulations (food is no longer counted as in-kind support and maintenance under the Social Security Administration's final rule, 89 Fed. Reg. 21,199 (Mar. 27, 2024), eff. Sept. 30, 2024; see 20 C.F.R. § 416.1130); or
c. Make any payment that constitutes “in-kind support and maintenance” unless permissible without benefit reduction.

3.7 Accumulation of Income

All undistributed Income shall be accumulated and added to Principal.

3.8 Termination of Trust

The Trust shall terminate upon the earliest of:
a. Beneficiary’s death (subject to Section 3.12, if applicable);
b. Exhaustion of the Trust Estate;
c. Court order under Miss. Code Ann. § 91-8-412 based on circumstances not anticipated by Settlor where continuation on the Trust’s existing terms would be impracticable, wasteful, or impair the Trust’s administration; or
d. Court order (or Trustee action after notice to qualified beneficiaries) under Miss. Code Ann. § 91-8-414 if the Trust Estate is valued at less than One Hundred Fifty Thousand Dollars ($150,000.00) and the cost of administration is not justified by its value.

3.9 Final Distribution

Upon termination, Trustee shall distribute the remaining Trust Estate as follows:

1. Pay any unpaid expenses of the Trust, including reasonable Trustee compensation and expenses, and taxes due;
2. [INSERT REMAINDER DESIGNATION – e.g., to Settlor’s descendants per stirpes].

3.10 Administrative Flexibility

Trustee may make elections under federal or state tax law and may allocate receipts and disbursements between Income and Principal as Trustee deems advisable to carry out the Trust purposes.

3.11 Trustee Powers

Subject to fiduciary duties and Miss. Code Ann. § 91-8-815, Trustee shall have all powers a prudent person would have in managing like property, including but not limited to investment, delegation, leasing, lending, borrowing, and employing professionals.

3.12 Medicaid Payback (Self-Settled Trust Option)

[OPTIONAL – include ONLY if Trust is self-settled under 42 U.S.C. § 1396p(d)(4)(A)]
Upon Beneficiary’s death, after payment of allowable administrative expenses, Trustee shall reimburse the Mississippi Division of Medicaid and any other state Medicaid agency that provided medical assistance to Beneficiary, up to the total amount of such assistance paid on Beneficiary’s behalf. Any remaining balance shall then be distributed pursuant to Section 3.9(2).

4. REPRESENTATIONS & WARRANTIES

4.1 Settlor represents that:
a. Settlor has full legal capacity and title to all property transferred to the Trust;
b. Establishment of the Trust will not render Settlor insolvent.

4.2 Trustee represents that:
a. Trustee is qualified and willing to act, has no conflict of interest, and will administer the Trust in good faith;
b. Corporate Trustee (if any) is duly organized, in good standing, and authorized to conduct trust business in Mississippi.

4.3 Survival
All representations and warranties shall survive execution and remain in effect throughout the Trust term.

5. COVENANTS & RESTRICTIONS

5.1 Trustee shall comply with all fiduciary duties under Mississippi law, the Internal Revenue Code, and Applicable Benefits regulations.

5.2 Settlor and Beneficiary shall cooperate in providing information necessary for Trustee to maintain benefit eligibility.

5.3 Notice of Change in Circumstances
Beneficiary (or legal guardian) shall notify Trustee within 30 days of any change that could affect benefit eligibility.

5.4 Accounting & Reports
Trustee shall furnish an annual written accounting within 60 days after each Accounting Period to Beneficiary, any guardian, and the Designated Probate Court if required. Failure to object in writing within 90 days constitutes approval.

6. DEFAULT & REMEDIES

6.1 Events of Default
a. Trustee’s willful misconduct, gross negligence, or material breach of fiduciary duty;
b. Failure to provide the accounting required under Section 5.4 after a reasonable written request, subject to applicable law;
c. Trustee incapacity, resignation without successor, or failure to act.

6.2 Remedies
Upon an Event of Default, any interested person may petition the Designated Probate Court to:

1. Compel accounting or performance;
2. Surcharge Trustee;
3. Remove and replace Trustee;
4. Seek other equitable relief, including injunctive relief to enforce trust terms.

6.3 Attorneys’ Fees
Fees and costs are governed by Miss. Code Ann. § 91-8-1004. This Trust creates no automatic prevailing-party award.

7. RISK ALLOCATION

7.1 Proper Administration Expenses

Trustee may pay reasonable administration expenses as permitted by Miss. Code Ann. §§ 91-8-805 and 91-8-816. This provision does not indemnify Trustee or an agent from liability for breach of trust.

7.2 Statutory Liability Rules

Contract, property-related, and tort liability is governed by Miss. Code Ann. § 91-8-1010. Nothing in this Trust caps liability for breach of trust at the value of Trust property or limits remedies under § 91-8-1001. Any exculpatory term is subject to § 91-8-1008.

7.3 Insurance

Trustee may purchase, with Trust assets, insurance against liability arising from administration of the Trust.

7.4 Force Majeure

Trustee shall not be liable for delay or failure to perform due to events beyond Trustee’s reasonable control, including natural disasters, governmental actions, or market disruptions.

8. DISPUTE RESOLUTION

8.1 Governing Law
See Section 1.3.

8.2 Forum Selection
Jurisdiction and venue are governed by Miss. Code Ann. §§ 91-8-201 to 91-8-204.

8.3 Limited Arbitration
The Trustee and affected interested persons may agree in writing to mediate or arbitrate a dispute within the authority recognized by Miss. Code Ann. §§ 91-8-816(b)(23) and 91-8-1004(c). This Trust does not impose mandatory arbitration.

8.4 Jury Rights
This Trust does not waive any jury-trial right available under applicable law.

8.5 Injunctive Relief
Nothing herein limits a party’s right to seek temporary or permanent injunctive relief from the Designated Probate Court to enforce Trust terms.

9. GENERAL PROVISIONS

9.1 Amendment & Reformation
The Trust may be amended only by court order if necessary to comply with changes in Applicable Benefits law or tax law and only if such amendment furthers the primary purpose of maintaining Beneficiary’s eligibility.

9.2 Resignation & Succession of Trustee
a. Trustee may resign upon 30 days’ written notice;
b. A successor trustee may be designated in Schedule B or, if none, by the Designated Probate Court;
c. Successor Trustee shall accept in writing and shall have all rights and duties of the original Trustee.

9.3 Assignment
No party may assign, delegate, or transfer any rights or obligations except as expressly permitted herein or by court order.

9.4 Severability
If any provision is held invalid or unenforceable, the remaining provisions shall remain in full force, and the invalid provision shall be reformed to reflect the original intent to the extent permitted by law.

9.5 Entire Agreement
This Trust Agreement, together with attached schedules, constitutes the entire agreement and supersedes all prior agreements regarding the Trust.

9.6 Counterparts; Electronic Signatures
This Trust Agreement may be executed in one or more counterparts, each of which shall be deemed an original. Signatures transmitted electronically or by facsimile shall be deemed original signatures.

10. EXECUTION BLOCK

IN WITNESS WHEREOF, the parties have executed this Trust Agreement as of the Effective Date.

10.1 Settlor

_________________________________________
[SETTLOR NAME], Settlor

10.2 Trustee

_________________________________________
[TRUSTEE NAME], Trustee
Title (if corporate): ______________________

10.3 Beneficiary (acknowledgment only)

_________________________________________
[BENEFICIARY NAME], Beneficiary

10.4 Notary Acknowledgment

State of Mississippi
County of [COUNTY]

On this ____ day of __________, 20__, before me, the undersigned Notary Public, personally appeared [NAME(S)], proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to this instrument, and acknowledged that he/she/they executed the same for the purposes therein contained.

_________________________________________
Notary Public
My commission expires: _____________

SCHEDULE A – Initial Trust Corpus

1. Cash: $[AMOUNT] deposited into Account No. [####] at [FINANCIAL INSTITUTION]
2. [DESCRIPTION OF ANY OTHER PROPERTY]

SCHEDULE B – Successor Trustee Designation

Primary Successor Trustee: [NAME & CONTACT]
Secondary Successor Trustee: [NAME & CONTACT]