Special Needs Trust - Nevada

[TRUST_NAME] SPECIAL NEEDS TRUST

(Governing Law: State of Nevada)

TABLE OF CONTENTS

1. Document Header
2. Definitions

3. Operative Provisions
   3.1 Creation and Funding
   3.2 Purpose and Intent
   3.3 Beneficial Interests
   3.4 Distributions
   3.5 Termination

4. Representations & Warranties

5. Covenants & Restrictions
6. Default & Remedies
7. Risk Allocation
8. Dispute Resolution
9. General Provisions
10. Execution Block

1. DOCUMENT HEADER

THIS SPECIAL NEEDS TRUST (the “Trust”) is made as of [EFFECTIVE_DATE] (the “Effective Date”) by and between:

• [SETTLOR_NAME], an individual with an address at [SETTLOR_ADDRESS] (the “Settlor”); and
• [TRUSTEE_NAME], [individual/corporate trustee] whose principal place of business is [TRUSTEE_ADDRESS] (the “Trustee”).

RECITALS
A. The Settlor desires to establish a trust under Nevada law for the sole benefit of [BENEFICIARY_NAME] (the “Beneficiary”), who is a person with a disability as defined in 42 U.S.C. § 1382c(a)(3).
B. The Settlor intends that all Trust assets be administered so as to supplement, and not supplant, any means-tested governmental benefits for which the Beneficiary may be or become eligible.
C. The Trustee is willing to accept the office of trustee and administer the Trust pursuant to the terms herein.

NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Settlor hereby transfers to the Trustee the property listed on Schedule A attached hereto, to be held, managed, and distributed in trust as provided below.

2. DEFINITIONS

When used in this Trust instrument, the terms below shall have the following meanings:

“Administrative Trustee” – Any additional trustee appointed solely for Nevada‐situs or administrative compliance purposes.
“Arbitration Rules” – The NV Uniform Arbitration Act as adopted in NRS Chapter 38, as modified by Section 8.3.
“Beneficiary” – [BENEFICIARY_NAME].
“Discretionary Distribution” – Any distribution made in the Trustee’s sole and absolute discretion pursuant to Article 3.4.
“Governing Law” – The laws of the State of Nevada, excluding its conflict-of-laws principles.
“Means-Tested Benefits” – Medicaid (Title XIX), SSI (Title XVI), SNAP, Section 8 housing, or any similar federal or state needs-based program.
“Qualified Disability Expenses” – Expenses that enhance the Beneficiary’s quality of life and are not inconsistent with benefit eligibility, including but not limited to education, therapies, travel, recreation, personal care, and adaptive equipment.
“Special Needs” – Needs arising from the Beneficiary’s disability that are not fully met by public benefits, including Qualified Disability Expenses.
“Trust Assets” – All property, real or personal, tangible or intangible, held from time to time under this instrument.
“Trust Protector” – The individual or entity appointed under Section 3.6 with limited oversight powers.

3. OPERATIVE PROVISIONS

3.1 Creation and Funding

3.1.1 Irrevocability. This Trust is irrevocable. The Settlor waives all rights to alter, amend, revoke, or terminate the Trust, except as expressly provided herein.
3.1.2 Additional Contributions. Additional assets may be added to the Trust with the Trustee’s consent, subject to Section 3.1.3 and provided the additions do not jeopardize the Beneficiary’s eligibility for Means-Tested Benefits.
3.1.3 First-Party Funding Check. If any assets contributed to this Trust belong to the Beneficiary and the Trust is intended to use the 42 U.S.C. § 1396p(d)(4)(A) exception, the Beneficiary must be disabled and under age 65 when this Trust is established. Beneficiary's date of birth: [__/__/____]. Date this Trust is established: [__/__/____]. Beneficiary's age on that date: [____]. The Trustee shall verify those facts before accepting Beneficiary-owned assets and obtain benefits counsel's review before accepting additional Beneficiary-owned assets after age 65. If only assets from persons other than the Beneficiary are contributed, this first-party age condition does not apply.

3.2 Purpose and Intent

The Trust is intended to qualify as a “Supplemental Needs” or “Special Needs” trust under applicable federal and Nevada law. Trust Assets shall be used exclusively to provide for the Beneficiary’s Special Needs and to maintain the Beneficiary’s eligibility for Means-Tested Benefits.

3.3 Beneficial Interests

3.3.1 Sole Benefit. During the Beneficiary’s lifetime, no person other than the Beneficiary shall have any beneficial interest in or entitlement to Trust Assets.
3.3.2 Spendthrift Protection. The Settlor directs that the Beneficiary’s interest may not be transferred, voluntarily or involuntarily, before the Trustee delivers it to the Beneficiary, as permitted by NRS 163.417(3). To the extent this Trust qualifies as a spendthrift trust under NRS Chapter 166, its statutory restraints on alienation and creditor claims apply, subject to applicable exceptions.

3.4 Distributions

3.4.1 Discretionary Standard. The Trustee may, in the Trustee’s sole and absolute discretion, make Discretionary Distributions for the Beneficiary’s Special Needs. No distribution shall be made that would reduce or eliminate Means-Tested Benefits unless, after consultation with qualified benefits counsel, the Trustee determines such distribution is in the Beneficiary’s best interests.
3.4.2 Prohibited Distributions. The Trustee shall not make any distribution:
(a) for shelter (rent, mortgage, real property taxes, or utilities such as heat, gas, electricity, water, sewer, or garbage collection) without first obtaining a benefits analysis, because such payments may constitute in-kind support and maintenance ("ISM") countable as unearned income under 42 U.S.C. § 1382a(a)(2)(A), reducing the Beneficiary's SSI payment under the one-third-reduction or presumed-maximum-value rules. (For distributions made on or after September 30, 2024, the Trustee may disburse Trust Assets directly for the Beneficiary's food without a benefits analysis, because the Social Security Administration's final rule, "Omitting Food From In-Kind Support and Maintenance Calculations," 89 Fed. Reg. 21199 (Mar. 27, 2024), removed food from the ISM calculation effective that date; shelter remains subject to ISM analysis.);
(b) in cash to the Beneficiary or to the Beneficiary's personal debit card, which SSA treats as unearned income under POMS SI 01120.200E.1.a; or
(c) for any purpose that would constitute unearned "support and maintenance" to the Beneficiary within the meaning of 42 U.S.C. § 1382a(a)(2)(A), other than food as permitted by paragraph (a).
3.4.3 Distribution Mechanics. Distributions may be made by direct payment to vendors, reimbursement to third parties, or purchase of goods or services for the Beneficiary’s use.

3.5 Termination

3.5.1 Lifetime Termination. The Trust shall terminate on the earlier of:
(a) the date the Trustee, after consultation with the Trust Protector and competent benefits counsel, determines that continued administration is no longer necessary to achieve the Trust’s purpose; or
(b) the exhaustion of Trust Assets.
If this Trust holds Beneficiary-owned assets under 42 U.S.C. § 1396p(d)(4)(A) and terminates before the Beneficiary's death with assets remaining, the Trustee shall first pay only termination taxes and reasonable termination administration expenses permitted by SSA POMS SI 01120.199E.3, then reimburse each state for Medicaid assistance paid on the Beneficiary's behalf up to the available balance. Any funds remaining after those payments shall be distributed solely for the Beneficiary's benefit. The Beneficiary has no power to terminate the Trust. This paragraph does not impose first-party Medicaid reimbursement on assets contributed solely by another person; the Trustee shall identify the source of any mixed funding before distribution.
3.5.2 Post-Death Administration. Upon the death of the Beneficiary, the Trustee shall:
(a) If this Trust holds the Beneficiary's own assets and is intended to qualify under 42 U.S.C. § 1396p(d)(4)(A), pay before Medicaid reimbursement only taxes due from this Trust to a state or the federal government because of the Beneficiary's death and reasonable fees to administer and wind up this Trust, as allowed by SSA POMS SI 01120.203E.1;
(b) For those first-party assets, reimburse every state whose Medicaid program provided medical assistance on the Beneficiary's behalf, from all amounts then remaining in the Trust, up to the total assistance paid, before paying the Beneficiary's other debts, estate taxes, or remainder beneficiaries. If the Trust cannot pay all states in full, allocate the available amount among them as applicable law requires. Do not limit this obligation to Nevada or to assistance paid during a particular period;
(c) After satisfying the applicable Medicaid reimbursement, pay other lawful expenses and distribute any balance to the remainder beneficiaries listed in Schedule B. If this Trust contains only assets contributed by a person other than the Beneficiary, paragraph (b) does not impose first-party Medicaid reimbursement on those assets.

3.6 Trust Protector

The Settlor appoints [PROTECTOR_NAME] as Trust Protector. The Trust Protector may:
(a) remove and replace the Trustee;
(b) approve Trustee compensation;
(c) amend the Trust for tax or benefits compliance, provided the amendment does not alter the Trust’s purpose.

4. REPRESENTATIONS & WARRANTIES

4.1 Settlor Representations. The Settlor represents that:
(a) Settlor has legal capacity to create this Trust;
(b) all property transferred is free of encumbrances, save as disclosed on Schedule A; and
(c) execution of this Trust does not violate any court order or agreement.

4.2 Trustee Representations. The Trustee represents that:
(a) Trustee has reviewed this instrument and agrees to serve under its terms;
(b) Trustee is qualified under Nevada law to act as trustee; and
(c) Trustee has obtained any licenses or bonding required by law or contract.

Survival. All representations and warranties shall survive execution and remain in full force for the duration of the Trust.

5. COVENANTS & RESTRICTIONS

5.1 Affirmative Covenants of Trustee
(a) Compliance. Administer the Trust in conformity with Nevada law and all applicable federal statutes, including 42 U.S.C. §§ 1382b & 1396p.
(b) Record-Keeping. Maintain complete fiduciary accounting in accordance with generally accepted trust accounting principles and furnish annual reports to the Beneficiary’s legal guardian and the Trust Protector.
(c) Benefits Coordination. Consult periodically with qualified public-benefits counsel to ensure ongoing compliance.

5.2 Negative Covenants
The Trustee shall not:
(a) commingle Trust Assets with non-trust assets;
(b) engage in self-dealing or transactions prohibited by NRS Chapter 163 unless specifically authorized by court order; or
(c) make any distribution that would convert countable resources to the Beneficiary.

5.3 Notice & Cure
In the event of a breach, the Trustee must give written notice to the Settlor (if living), the Beneficiary’s guardian, and the Trust Protector. The Trustee has 30 days to cure before removal procedures under Article 6.2 may commence.

6. DEFAULT & REMEDIES

6.1 Events of Default
The following constitute defaults:
(a) material breach of fiduciary duties;
(b) failure to render an accounting within 60 days after written demand;
(c) insolvency or bankruptcy of the Trustee;
(d) any act jeopardizing Means-Tested Benefits.

6.2 Trustee Removal
Upon default, the Trust Protector—or if none, the district court of the State of Nevada, sitting in probate under NRS 132.116 and exercising jurisdiction over the Trust pursuant to NRS 164.010 and 164.015—may remove the Trustee and appoint a successor.

6.3 Graduated Remedies

• First Tier: Written warning and 30-day cure.
• Second Tier: Suspension of distribution powers during investigation.
• Third Tier: Formal removal and surcharge for losses caused.

6.4 Attorneys’ Fees
A prevailing party in any action to enforce this Trust is entitled to recover reasonable attorneys’ fees and costs, payable from the Trust Assets except as otherwise ordered by the court.

7. RISK ALLOCATION

7.1 Exoneration or Reimbursement
The Trustee's right to exoneration or reimbursement from the Trust Assets for tort liability is governed by NRS 163.130 and 163.140. This Trust does not authorize exculpation or indemnification for the Trustee's own willful misconduct or gross negligence under NRS 163.004.

7.2 Exculpation and Personal Liability
No term relieves the Trustee from liability beyond the limits of NRS 163.160. Contract liability is governed by NRS 163.120, and tort liability by NRS 163.130 and 163.140. This Trust creates no blanket cap limited to Trust Assets.

7.3 Insurance
The Trustee may purchase fiduciary liability insurance payable from the Trust, naming the Trust and Trustee as insureds.

7.4 Mandatory Duties Preserved
Nothing in this Trust excuses a mandatory fiduciary duty or expands the exculpation permitted by NRS 163.160.

8. DISPUTE RESOLUTION

8.1 Governing Law
This Trust shall be governed by and construed in accordance with the laws of the State of Nevada.

8.2 Forum Selection
Exclusive jurisdiction over all trust matters shall lie in the probate or guardianship division of the [COUNTY_NAME] District Court, State of Nevada.

8.3 Limited Arbitration
Disputes solely regarding Trustee compensation or accounting shall be submitted to binding arbitration under the Arbitration Rules. All other matters remain within the exclusive jurisdiction of the court specified in Section 8.2.

8.4 Jury Waiver
A contest of the validity of this Trust is tried by the district court without a jury, as provided in NRS 164.015(4); if such a contest is consolidated with a will contest for which a jury has been demanded under NRS 137.020, the court may instruct the jury to render only an advisory opinion on the trust issues under NRS 164.015(5). To the extent any claim arising under this Trust is nonetheless determined to be triable to a jury, the parties knowingly and voluntarily waive that right.

8.5 Injunctive Relief
Nothing herein limits the court’s equity power to issue temporary, preliminary, or permanent injunctions to enforce Trust terms.

9. GENERAL PROVISIONS

9.1 Amendments
Except as may be required to maintain the Trust’s compliance with tax or public-benefits law, this Trust may not be amended. Any permissible amendment must:
(a) be in writing;
(b) be executed by the Trustee and Trust Protector; and
(c) not alter the Trust’s primary purpose.

9.2 Assignment
No party may assign rights or delegate duties without prior written consent of the Trust Protector.

9.3 Successors & Assigns
This Trust is binding upon and inures to the benefit of all successors, assigns, and legal representatives of the parties.

9.4 Severability
If any provision is held invalid or unenforceable, the remaining provisions shall remain in full force and effect, and the court may reform the invalid provision to best approximate the Settlor’s intent.

9.5 Integration
This instrument constitutes the entire agreement concerning the Trust. All prior agreements, whether oral or written, are merged herein.

9.6 Counterparts; Electronic Signatures
This Trust may be executed in counterparts, each of which is deemed an original; together they constitute one instrument. Signatures transmitted via electronic means shall be deemed original for all purposes under NRS 719.240.

10. EXECUTION BLOCK

IN WITNESS WHEREOF, the Settlor and Trustee have executed this Trust as of the Effective Date.

SETTLOR:

_____________________________
[SETTLOR_NAME]

Date: _____________

TRUSTEE:

_____________________________
[TRUSTEE_NAME]
Title (if corporate): __________

Date: _____________

NOTARY ACKNOWLEDGMENT
State of Nevada )
County of ________ )

On this ___ day of ______, 20__, before me, the undersigned Notary Public, personally appeared [SETTLOR_NAME] and [TRUSTEE_NAME], personally known to me or proved on the basis of satisfactory evidence to be the individuals whose names are subscribed to this instrument, and acknowledged that they executed the same for the purposes therein contained.

_____________________________
Notary Public

My Commission Expires: ________

SCHEDULE A – INITIAL TRUST PROPERTY

[List assets being transferred, e.g., cash, securities, life insurance proceeds.]

SCHEDULE B – REMAINDER BENEFICIARIES

1. [NAME / RELATIONSHIP / SHARE]
2. [NAME / RELATIONSHIP / SHARE]

END OF DOCUMENT