Special Needs Trust - North Carolina

NORTH CAROLINA THIRD-PARTY SPECIAL NEEDS TRUST

Before you use this: This instrument accepts property only from someone other than Beneficiary or Beneficiary's spouse. Complete the actual initial transfer, successor names, and remainder recipients before signing. If Beneficiary or spouse owns the proposed funds, use separate advice and an appropriate instrument.

This trust is made on [__/__/____] by [SETTLOR FULL LEGAL NAME] of [ADDRESS] (Settlor) and [INITIAL TRUSTEE FULL LEGAL NAME] of [ADDRESS] (Trustee) for [BENEFICIARY FULL LEGAL NAME] of [ADDRESS] (Beneficiary). The trust's name is [FULL TRUST NAME]. Settlor is neither Beneficiary nor Beneficiary's spouse.

1. Creation and present property transfer

Settlor irrevocably transfers $[AMOUNT] in cash to Trustee today. Trustee acknowledges actual receipt in Schedule A and accepts this trusteeship by signing below. Trustee shall hold the property separate from personal property and administer it under this instrument and North Carolina law. A later gift joins the trust only when actually transferred by a person other than Beneficiary or Beneficiary's spouse and accepted in Trustee's records. Trustee shall reject a contribution whose source is uncertain until its ownership and benefit treatment are resolved.

This trust is irrevocable. Settlor retains no individual power to revoke this trust or reclaim accepted property. Trustee has no unilateral power to replace the distribution or remainder plan. Modification or termination, if available, requires the conditions of applicable North Carolina law; this instrument grants Beneficiary no power to dissolve the trust and take its assets.

2. Purpose and discretionary distributions

Trustee may distribute income or principal, or pay a provider directly, for Beneficiary's health, care, education, equipment, transportation, housing, recreation, and other needs in Trustee's reasoned discretion. Trustee shall consider current SSI, Medicaid, and other applicable program rules before choosing the amount, form, and timing of a payment. Beneficiary may request a payment but cannot require one merely by requesting it, designate its recipient, or withdraw trust assets. Trustee's discretion remains subject to fiduciary duties and court review for abuse under N.C. Gen. Stat. §§ 36C-5-504(e) and 36C-8-814(a).

This instrument aims to supplement Beneficiary's support. It does not promise that trust assets or distributions will be disregarded by any benefit program. Trustee may consult qualified benefits counsel when the effect of a payment is uncertain and shall document the decision. Because third-party trust treatment depends on the true source of property and Beneficiary's actual rights, Trustee shall not accept Beneficiary's or spouse's assets through another person.

3. Administration and information

Trustee shall administer in good faith, keep adequate records, identify trust assets, and invest and manage under the applicable prudent investor rule. Trustee shall give qualified beneficiaries the information, trust copy, and record access required by N.C. Gen. Stat. § 36C-8-813. Trustee shall send an annual written report of receipts, disbursements, assets, liabilities, and Trustee compensation to Beneficiary or an authorized representative and to each other qualified beneficiary. Trustee shall make any additional report required by an applicable benefit program.

Trustee may pay reasonable costs of administration and engage suitable advisers. Trustee remains personally accountable under governing law. This instrument creates no blanket immunity, trust-assets-only liability cap, or advance release of liability for bad faith or reckless indifference.

4. Spendthrift interest

Beneficiary's interest is held subject to a spendthrift trust. Before receipt of a payment, a beneficiary may not voluntarily transfer or encumber an interest in this trust, and involuntary transfer is restrained to the extent North Carolina law permits. Creditors' rights remain subject to the exceptions in Article 5 of Chapter 36C; this clause does not erase a statutory claim or prevent lawful review of Trustee's conduct.

5. Trustee succession

If Trustee dies, resigns, is removed, or cannot serve, [FIRST SUCCESSOR FULL NAME AND ADDRESS] shall serve. If that person cannot serve, [SECOND SUCCESSOR FULL NAME AND ADDRESS] shall serve. Each successor must accept in a signed writing and take custody of the trust property and records. If neither accepts, a successor shall be selected in the order N.C. Gen. Stat. § 36C-7-704(c) provides.

A serving Trustee may resign with at least 30 days' written notice to the qualified beneficiaries, Settlor if living, and all cotrustees, or with court approval under § 36C-7-705. The resigning Trustee shall arrange orderly transfer of property and records and furnish a final accounting; resignation does not discharge prior liability.

6. Beneficiary's death and complete remainder

This trust ends at Beneficiary's death or when no trust property remains. After paying proper administration expenses and claims legally chargeable to trust property, Trustee shall distribute all remaining property as follows:

1. 100% to [PRIMARY REMAINDER BENEFICIARY FULL NAME AND ADDRESS], if living.
2. If that person has not survived Beneficiary, 100% to [ALTERNATE REMAINDER BENEFICIARY FULL NAME AND ADDRESS], if living.
3. If neither survives, 100% to [FINAL CONTINGENT CHARITY LEGAL NAME, ADDRESS, AND EIN]. If that charity does not exist at distribution, 100% to [SECOND CONTINGENT CHARITY LEGAL NAME, ADDRESS, AND EIN].

Trustee shall prepare a final accounting and document the final transfers. No beneficiary's own property may be added to this instrument by treating it as a third-party gift. This remainder clause does not declare that no public agency can have any claim under applicable law.

7. Governing law and signatures

North Carolina law governs this trust. Settlor and Trustee sign to establish the trust, complete the present transfer, and accept the office.

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

[SETTLOR FULL LEGAL NAME]

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

[INITIAL TRUSTEE FULL LEGAL NAME]

Schedule A — initial property and receipt

Settlor transfers $[AMOUNT] in cash to Trustee on [__/__/____] by [DELIVERY METHOD]. Trustee acknowledges actual receipt of that cash for this trust.

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

Sources and references

N.C. Gen. Stat. Chapter 36C; SSA POMS SI 01120.200.