RHODE ISLAND SUPPLEMENTAL NEEDS TRUST AGREEMENT

(Third-Party, Irrevocable)

[// GUIDANCE: This template is intended for a third-party supplemental (special) needs trust funded with assets that have never belonged to the Beneficiary. If the trust will hold the Beneficiary’s own assets, substantial modifications—especially a Medicaid “pay-back” clause compliant with 42 U.S.C. § 1396p(d)(4)(A)—are required.]

TABLE OF CONTENTS

1. Document Header.................................................................................................................1
2. Definitions......................................................................................................................................2
3. Creation and Funding of Trust..................................................................................................5
4. Purpose and Nature of Trust.....................................................................................................5
5. Administration and Distributions for Supplemental Needs.............................................6
6. Trustee Powers and Duties.........................................................................................................8
7. Representations and Warranties.............................................................................................11
8. Covenants and Restrictions.....................................................................................................12
9. Spendthrift and Creditor Protection......................................................................................13
10. Default; Removal and Replacement of Trustee...............................................................14
11. Risk Allocation...........................................................................................................................16
12. Dispute Resolution....................................................................................................................17
13. General Provisions....................................................................................................................18
14. Execution Block........................................................................................................................20

Schedules
A. Initial Trust Property
B. Illustrative List of Supplemental Needs

Page numbers are for drafting convenience and should be updated at final formatting.

1. DOCUMENT HEADER

Trust Title: Rhode Island Supplemental Needs Trust for the Benefit of [BENEFICIARY NAME]

Effective Date: [EFFECTIVE DATE]

Settlor: [SETTLOR LEGAL NAME], residing at [ADDRESS] (“Settlor”)

Trustee: [TRUSTEE LEGAL NAME], residing at [ADDRESS] (“Trustee”)
[// GUIDANCE: Add co-trustee or corporate trustee lines as necessary.]

Beneficiary: [BENEFICIARY LEGAL NAME], a person with a disability as defined herein (“Beneficiary”)

Governing Law: The laws of the State of Rhode Island (see Section 12.1)

Forum Selection: Exclusive jurisdiction of the [NAME OF MUNICIPAL] Probate Court (see Section 12.2)

2. DEFINITIONS

For purposes of this Trust Agreement, the terms below have the following meanings. Defined terms are used in initial-capital form throughout and are intended to be construed consistently wherever they appear.

“Accounting Period” – Each calendar year ending December 31 or such shorter period as may be required by law or by Section 5.13.

“Act” – Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq., and all implementing regulations and program manuals applicable to Medicaid and SSI eligibility.

“Alternate Trustee” – The person or entity designated under Section 10.4 to serve if the original Trustee resigns, is removed, or becomes unable to serve.

“Beneficiary” – The individual named in the Document Header meeting the definition of Person with a Disability and for whose sole benefit the Trust Estate shall be administered.

“Distribution Standard” – The discretionary standard described in Section 5.1 permitting distributions solely for Supplemental Needs.

“Government Benefits” – All present or future means-tested or needs-based public assistance programs including, without limitation, Supplemental Security Income (“SSI”), Medicaid, Medicare Savings Programs, subsidized housing, and SNAP benefits.

“Person with a Disability” – An individual who meets the definition of “disabled” under 42 U.S.C. § 1382c(a)(3) and relevant Rhode Island law, as evidenced by an SSA determination or equivalent competent medical opinion.

“Probate Court” – The [NAME OF MUNICIPAL] Probate Court sitting in the State of Rhode Island.

“Qualified Distributions” – Distributions by Trustee that satisfy the requirements of Section 5.3 and do not constitute “income” or “resources” to the Beneficiary under the Act or applicable Program Operations Manual System (“POMS”) provisions.

“Schedule A” – The schedule attached hereto listing the Initial Trust Property.

“Supplemental Needs” – Goods, services, or experiences that promote Beneficiary’s health, safety, welfare, and quality of life but are not otherwise provided by Government Benefits, as further illustrated in Schedule B.

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

“Trust Estate” – All property transferred to the Trust, together with all reinvestments, accretions, and proceeds.

“Trustee” – Each individual or entity acting in the fiduciary capacity of trustee under this Trust Agreement, including any successor or co-trustee.

3. CREATION AND FUNDING OF TRUST

3.1 Irrevocable Creation. Settlor hereby irrevocably establishes the Trust under Rhode Island law by executing this Trust Agreement and by transferring to Trustee the Initial Trust Property described in Schedule A.

3.2 Additions. Subject to Section 3.3, additional property may be added to the Trust at any time by Settlor or any third party by gift, bequest, beneficiary designation, or other legal transfer, provided such property is acceptable to Trustee.

3.3 Prohibited Additions. No property owned by Beneficiary, or to which Beneficiary is legally entitled, shall be added to the Trust unless this Agreement is first amended to comply with 42 U.S.C. § 1396p(d)(4)(A).

3.4 Separate Property. All property comprising the Trust Estate shall be kept separate from Trustee’s personal assets and from any other trust assets administered by Trustee.

4. PURPOSE AND NATURE OF TRUST

4.1 Sole Benefit. The primary purpose of this Trust is to provide for Beneficiary’s Supplemental Needs in a manner that preserves Beneficiary’s eligibility for Government Benefits.

4.2 Supplemental, Not Supplanting. Distributions are intended to supplement, not supplant or replace, Government Benefits. Trustee shall administer the Trust so that Trust assets are not deemed “available resources” or “countable income” under the Act or any analogous Rhode Island statute or regulation.

4.3 Duration. The Trust shall continue until the earlier of (a) the death of Beneficiary; (b) exhaustion of the Trust Estate; or (c) termination under Section 12.5.

5. ADMINISTRATION AND DISTRIBUTIONS FOR SUPPLEMENTAL NEEDS

5.1 Discretionary Standard. Trustee may, but is not required to, make distributions for Beneficiary’s Supplemental Needs, in Trustee’s sole and absolute discretion, subject to the limitations of this Article 5. Beneficiary shall have no right to compel distributions.

5.2 Consultation with Advisors. Before authorizing any distribution, Trustee shall consider written guidance from competent benefits counsel, the Beneficiary’s care manager, or other qualified advisors to ensure compliance with Government Benefits regulations.

5.3 Qualified Distributions. A distribution qualifies under this Section if:
 a. It is for a Supplemental Need;
 b. It is paid directly to the provider of goods or services whenever practicable; and
 c. It does not create countable income or resources for Beneficiary.

5.4 Prohibited Distributions. Trustee shall not:
 a. Pay cash directly to Beneficiary except as expressly permitted by applicable POMS;
 b. Reimburse Settlor, Trustee, or any third party for support obligations otherwise legally due; or
 c. Make any distribution that would reduce or eliminate Government Benefits without prior written consent of Beneficiary’s legal representative.

5.5 Emergency Exception. Notwithstanding Section 5.4, Trustee may make a distribution that adversely affects Government Benefits if Trustee determines, in a duly-documented written record, that the distribution is necessary to avert imminent risk to Beneficiary’s health or safety.

5.6 Record-Keeping. Trustee shall maintain contemporaneous records of each distribution, including its purpose and supporting documentation, for not less than seven (7) years and shall produce such records upon reasonable request of any Government Benefits agency or the Probate Court.

5.7 Tax Matters. Income attributable to the Trust shall be reported as provided in Section 12.9.

5.8 No Mandatory Support. Notwithstanding any rule of law to the contrary, the Trust is intended to be a discretionary, spendthrift trust; no distribution shall be deemed reachable by Beneficiary’s creditors, including any state agency, except as specifically set forth in Article 10.

5.9 Termination on Depletion. If at any time the Trust Estate is reduced to an amount that Trustee, in good-faith consultation with benefits counsel, deems uneconomical to administer, Trustee may terminate the Trust under Section 12.5.

6. TRUSTEE POWERS AND DUTIES

6.1 Standard of Care. Trustee shall act as a prudent person familiar with special needs trusts and shall comply with applicable provisions of Rhode Island law governing trustees, including the prudent investor standard.

6.2 Enumerated Powers. Subject to Article 5, Trustee has all powers conferred by Rhode Island statute and common law, including, without limitation, the power to:
 a. Invest and reinvest Trust Estate assets;
 b. Lease, sell, exchange, or encumber Trust property;
 c. Employ and compensate professional advisors;
 d. Commence, defend, or settle litigation on behalf of the Trust;
 e. Make elections and filings for federal or state tax purposes; and
 f. Exercise any digital asset rights of Beneficiary consistent with R.I. Gen. Laws Chapter 34-22 (Uniform Fiduciary Access to Digital Assets Act).

6.3 Bond. Unless waived in Schedule A or by order of the Probate Court, Trustee shall furnish a fiduciary bond in the amount of [BOND AMOUNT OR “WAIVED”].

6.4 Compensation. Trustee is entitled to reasonable compensation commensurate with the nature and value of the Trust Estate and the complexity of administration, payable from the Trust Estate as an administrative expense.

6.5 Accountings. Within ninety (90) days after the close of each Accounting Period, Trustee shall deliver a written accounting to Beneficiary (or Beneficiary’s legal representative) and any co-trustee, and shall file such accounting with the Probate Court as required by law.

6.6 Delegation. Trustee may delegate investment and administrative functions to qualified agents, provided Trustee retains general supervision and a written delegation agreement is executed.

6.7 Co-Trustees. If more than one Trustee is serving, the co-trustees shall act by majority vote unless otherwise provided in Schedule A.

6.8 Liability for Acts of Others. A Trustee is not liable for the acts or omissions of a past or co-trustee absent gross negligence or willful misconduct.

6.9 Acceptance of Additional Property. Trustee may refuse any property that could jeopardize Beneficiary’s eligibility for Government Benefits (e.g., property generating disqualifying income).

6.10 Resignation. Trustee may resign upon (a) sixty (60) days’ written notice to Settlor (if living), Beneficiary, and the Probate Court; and (b) acceptance by a qualified Successor Trustee in accordance with Section 10.4.

7. REPRESENTATIONS AND WARRANTIES

7.1 Settlor Representations. Settlor represents and warrants that:
 a. Settlor has full legal capacity and authority to establish this Trust and transfer property to it;
 b. All transferred property is free of liens or adverse claims, except as disclosed on Schedule A; and
 c. The Trust is not being established to hinder, delay, or defraud any creditor.

7.2 Trustee Representations. Trustee represents and warrants that:
 a. Trustee is legally qualified and, if an entity, duly organized and in good standing;
 b. Trustee possesses the requisite expertise to administer a supplemental needs trust; and
 c. Trustee will administer the Trust in accordance with this Agreement and applicable law.

7.3 Survival. The representations and warranties in this Article shall survive the execution of this Trust Agreement and continue for so long as the Trust remains in existence.

8. COVENANTS AND RESTRICTIONS

8.1 Compliance Covenant. Trustee shall administer the Trust in continuous compliance with:
 a. The Act and all regulations, including POMS SI 01120.200 and successor provisions;
 b. Applicable Rhode Island statutes governing trusts; and
 c. The Distribution Standard set forth in Article 5.

8.2 Notice of Benefit Changes. Beneficiary (or Beneficiary’s legal representative) shall promptly notify Trustee of any material change in Beneficiary’s Government Benefits status.

8.3 No Amendment Affecting Supplemental Needs Purpose. Neither Settlor nor Trustee shall amend this Trust in a manner that would disqualify the Trust as a valid supplemental needs trust or jeopardize Government Benefits eligibility, except as necessary to maintain compliance with changes in law.

8.4 Inspection Rights. Upon reasonable request, Beneficiary or Beneficiary’s legal representative may inspect Trust books and records at Trustee’s principal office during normal business hours.

9. SPENDTHRIFT AND CREDITOR PROTECTION

9.1 Spendthrift Provision. To the maximum extent permitted by law, the interest of Beneficiary in the Trust Estate shall not be subject to voluntary or involuntary alienation, assignment, garnishment, attachment, execution, or bankruptcy proceedings.

9.2 No Legal Assignability. Beneficiary shall have no power to transfer, anticipate, or encumber any interest in the Trust, and any purported assignment shall be void ab initio.

9.3 Exception. Nothing in this Article shall prevent enforcement of (a) Trustee compensation and expense reimbursement rights; or (b) a Probate Court order compelling Trustee to make a Qualified Distribution consistent with Article 5.

10. DEFAULT; REMOVAL AND REPLACEMENT OF TRUSTEE

10.1 Events of Default. The following constitute defaults:
 a. Failure by Trustee to make Qualified Distributions in accordance with Article 5 after written demand and thirty (30) days to cure;
 b. Material breach of fiduciary duty;
 c. Commencement of trustee insolvency or bankruptcy proceedings; or
 d. Conviction of Trustee for a crime involving dishonesty.

10.2 Notice and Cure. Any interested party may give written notice of default to Trustee and file such notice with the Probate Court. Trustee shall have thirty (30) days to cure the default unless the Probate Court orders otherwise.

10.3 Remedies. Upon uncured default, the Probate Court may:
 a. Remove Trustee;
 b. Surcharge Trustee personally;
 c. Enjoin further improper acts; and/or
 d. Award reasonable attorney fees and costs to the prevailing party.

10.4 Successor Trustee. If the office of Trustee becomes vacant, [ALTERNATE TRUSTEE NAME] (“Alternate Trustee”) shall serve. If Alternate Trustee is unable or unwilling, the Probate Court shall appoint a qualified successor.

10.5 Transition. A resigning or removed Trustee shall deliver all Trust property and records to the successor within thirty (30) days and shall sign all documents necessary to effectuate transfer.

11. RISK ALLOCATION

11.1 Trustee Indemnification. Except in cases of gross negligence, willful misconduct, or bad faith, Trustee and its agents shall be indemnified from the Trust Estate against all liabilities and expenses arising out of administration of the Trust.

11.2 Limitation of Liability. The liability of Trustee to Beneficiary or any third party is limited to the value of the Trust Estate and shall not extend to Trustee’s personal assets, except for acts of gross negligence, willful misconduct, or bad faith.

11.3 Insurance. Trustee may procure errors and omissions or fiduciary liability insurance, the premiums of which shall be payable from the Trust Estate.

11.4 Force Majeure. Trustee shall not be liable for failure to perform any duty when such failure is due to acts of God, governmental action, or other causes beyond Trustee’s reasonable control, provided Trustee acts diligently to resume performance.

12. DISPUTE RESOLUTION

12.1 Governing Law. This Trust Agreement and all disputes or claims arising hereunder shall be governed by and construed in accordance with the laws of the State of Rhode Island, without regard to its conflict-of-laws principles.

12.2 Forum Selection. The Probate Court shall have exclusive jurisdiction over all matters concerning the Trust, including accountings, removal actions, and interpretation disputes.

12.3 Limited Arbitration. Notwithstanding Section 12.2, any dispute solely concerning Trustee compensation may, at the election of both Trustee and Beneficiary’s legal representative, be submitted to binding arbitration administered by the American Arbitration Association (“AAA”) under its Commercial Arbitration Rules. Judgment on the award may be entered in the Probate Court.

12.4 Injunctive Relief. Nothing in this Article shall impair the Probate Court’s authority to issue temporary restraining orders or permanent injunctions to enforce the terms of the Trust or protect the Trust Estate.

12.5 Early Termination. Upon termination under Section 4.3(c) or this Section, Trustee shall, after payment of all approved expenses, distribute remaining Trust principal and undistributed income to the remainder beneficiaries designated in Schedule A, or, if none, to Settlor’s estate.

12.6 No Jury Trial. Proceedings in the Probate Court are non-jury; the Parties knowingly waive any right to trial by jury to the extent such right might otherwise apply.

13. GENERAL PROVISIONS

13.1 Amendment. This Trust may be amended only by written instrument executed by Settlor (if living) and Trustee, and approved by the Probate Court; provided, however, no amendment may (a) revoke the Trust; (b) grant Beneficiary any vested right to distributions; or (c) jeopardize Government Benefits eligibility.

13.2 Severability. If any provision of this Trust is held invalid or unenforceable, the remaining provisions shall remain in full force, and the invalid provision shall be deemed reformed to the minimum extent necessary to effectuate the Trust’s purposes.

13.3 Integration. This Trust Agreement, together with all schedules, constitutes the entire agreement of the Parties regarding the subject matter hereof and supersedes any prior understandings.

13.4 Assignment. Trustee may not assign its duties without compliance with Article 10. Beneficiary may not assign any interest herein.

13.5 Successors and Assigns. This Trust is binding upon and inures to the benefit of the Parties and their respective successors and permitted assigns.

13.6 Headings. Section headings are for convenience only and shall not affect interpretation.

13.7 Counterparts; Electronic Signatures. This Trust may be executed in counterparts, each of which shall be deemed an original. Signatures transmitted by electronic means shall be deemed original signatures.

13.8 Notice. All notices shall be in writing and deemed given upon (a) personal delivery, (b) certified mail (return receipt requested), or (c) nationally recognized overnight courier, addressed to the recipient at the address set forth in the Document Header (or such other address as a Party may designate by notice).

13.9 Tax Identification. Trustee shall obtain an employer identification number (“EIN”) for the Trust and file all required federal and state tax returns. Unless otherwise provided in Schedule A, the Trust shall be treated as a complex trust under Subchapter J of the Internal Revenue Code.

14. EXECUTION BLOCK

IN WITNESS WHEREOF, the undersigned Settlor and Trustee have executed this Rhode Island Supplemental Needs Trust Agreement as of the Effective Date written above.

Settlor

[SETTLOR NAME]

Trustee

[TRUSTEE NAME], Trustee

[// GUIDANCE: If a corporate trustee, add corporate signature block with title.]

Consent of Beneficiary (if competent and over 18)

I, [BENEFICIARY NAME], hereby acknowledge and consent to the establishment of this Trust for my sole benefit.

Beneficiary

Witnesses

Notary Acknowledgment

State of Rhode Island
County of ______

On this _ day of _, 20_, before me, the undersigned notary public, personally appeared [NAME(S)], known to me or satisfactorily proven to be the person(s) whose name(s) are subscribed to the foregoing instrument, and acknowledged that they executed the same for the purposes therein contained.

Notary Public
My Commission Expires: ____

SCHEDULE A – INITIAL TRUST PROPERTY

1. Cash: $[AMOUNT] transferred by check no. __ dated ____.
2. [DESCRIPTION OF SECURITIES] valued at $[AMOUNT].
3. [OTHER PROPERTY].

Alternate Trustee: [ALTERNATE TRUSTEE NAME AND ADDRESS]

Remainder Beneficiaries (on Beneficiary’s death):
1. [NAME], [Percentage]%
2. [NAME], [Percentage]%

SCHEDULE B – ILLUSTRATIVE LIST OF SUPPLEMENTAL NEEDS

The following non-exclusive items are intended to enhance Beneficiary’s quality of life and may be paid for from the Trust Estate if consistent with Article 5:

• Uncovered medical, dental, vision, and mental-health services
• Medical devices, mobility aids, and adaptive equipment
• Personal care attendants beyond hours covered by Medicaid
• Educational expenses, tutoring, and vocational training
• Transportation, including modified vehicles and ride services
• Computer equipment, internet, and assistive technology
• Recreation, cultural, or social activities and travel
• Home furnishings, maintenance, and accessibility modifications
• Legal and advocacy services
• Insurance premiums not otherwise covered

[// GUIDANCE: Tailor this list to Beneficiary’s specific circumstances and current POMS guidance.]

[// GUIDANCE: Before final execution, (1) confirm that all cross-references remain accurate after any customization, (2) review Rhode Island local probate rules for additional witnessing or court-approval requirements, and (3) obtain a benefits attorney’s opinion letter to ensure continued SSI/Medicaid compliance.]