Special Needs Trust - Texas

Texas Third-Party Supplemental Needs Trust

Trust name: [TRUST NAME]

Settlor: [SETTLOR FULL LEGAL NAME], of [ADDRESS].

Beneficiary: [BENEFICIARY FULL LEGAL NAME], born [DATE], of [ADDRESS].

Initial trustee: [TRUSTEE FULL LEGAL NAME], of [ADDRESS].

Execution date: [DATE]

1. Present transfer and trust creation

The Settlor now transfers and delivers the property identified in Schedule A to the Trustee, who accepts it by signing below. The Trustee shall hold the transferred property, its proceeds, and accepted later additions as a separate trust estate under these terms for the Beneficiary. The Settlor intends this signed writing to create an irrevocable trust under Texas law. No distribution to the Settlor is authorized. No person has a power under this instrument to revoke or amend it.

The Trustee shall accept additional property only from someone other than the Beneficiary or the Beneficiary's spouse. A proposed contribution from either of them shall be rejected and referred for separate benefits planning. The Trustee shall obtain and retain any deed, assignment, or other instrument needed to complete a particular asset transfer.

2. Beneficiary's supplemental needs

The purpose is to add to the Beneficiary's quality of life while taking account of means-tested benefits. The Trustee may distribute income or principal only for the Beneficiary's benefit, in amounts and at times the Trustee decides in good faith. The Beneficiary has no right to demand or direct a distribution. The Trustee is not obliged to provide basic support or to pay the Beneficiary's debts.

The Trustee may pay a provider, purchase goods or services, reimburse a documented expense, or make another payment the Trustee finds appropriate. Before paying, the Trustee shall consider current SSI, Medicaid, and other applicable program rules, the likely effect on benefits, and the Beneficiary's actual needs. The Trustee may make a payment that reduces a benefit if the Trustee concludes the benefit to the Beneficiary outweighs that reduction. This instrument guarantees no particular eligibility or tax result. Undistributed income remains in trust.

3. Termination and full remainder

The trust ends on the Beneficiary's death. The Trustee may continue for the reasonable time needed to pay proper trust expenses and wind up, as Tex. Prop. Code § 112.052 allows. The Trustee shall then distribute 100% of the remaining estate:

1. To [PRIMARY REMAINDER BENEFICIARY FULL NAME], if living;
2. If not, to [ALTERNATE REMAINDER BENEFICIARY FULL NAME], if living;
3. If neither is living, to the estate of [ALTERNATE REMAINDER BENEFICIARY FULL NAME].

This trust is funded solely by third-party property; it contains no first-party Medicaid payback direction. If an asset's ownership history is uncertain, the Trustee shall obtain qualified benefits advice before accepting it.

4. Trustee succession, powers, and accounts

If the Initial Trustee dies, resigns, becomes incapacitated, or is removed, [FIRST SUCCESSOR TRUSTEE FULL NAME] shall serve. If unavailable, [SECOND SUCCESSOR TRUSTEE FULL NAME] shall serve. If no named successor accepts, the court may appoint one under Tex. Prop. Code § 113.083. A successor shall take custody of trust property and records and continue these terms.

The Trustee may invest and reinvest, open trust accounts, retain or sell property, pay proper expenses, hire professional assistance, and take actions appropriate to management and distribution under Tex. Prop. Code ch. 113, subject to fiduciary duties. The Trustee shall keep property identifiable and separate, administer in good faith, and keep records of each receipt, disbursement, and distribution.

The Trustee shall provide an annual written accounting to the Beneficiary or the Beneficiary's legal representative and to each remainder beneficiary named above. The account shall describe property held, receipts, disbursements, transactions, cash balance, and known liabilities. A beneficiary may also demand an accounting in writing under Tex. Prop. Code § 113.151; the Trustee shall deliver it to each beneficiary within the statutory time unless the court orders more time. The voluntary annual promise does not narrow those statutory rights.

The Trustee may resign by giving 30 days' written notice to the Beneficiary or legal representative and each successor named above, with transfer of property and records on succession. Removal by a court remains available under Tex. Prop. Code § 113.082.

5. Spendthrift protection and trustee responsibility

The Beneficiary's interest in income and principal may not be voluntarily or involuntarily transferred before payment or delivery by the Trustee, to the extent Tex. Prop. Code § 112.035 permits. This provision does not shield an interest that law makes reachable or protect property after the Trustee distributes it.

The Trustee remains accountable for breach-of-trust damages under Tex. Prop. Code § 114.001. No term here caps the Trustee's liability at the value of trust assets or excuses bad faith, intentional breach, reckless indifference, or profit from breach contrary to § 114.007. A court may grant relief under § 114.008. The trust shall reimburse the Trustee only for proper expenses allowed by Texas law.

6. Governing law and signatures

Texas law governs the creation and administration of this trust. Proceedings concerning the trust may be brought in a court with jurisdiction under applicable law. The Settlor and Trustee sign below; Schedule A records property transferred now. When a particular asset requires acknowledgment or separate recording, complete those additional formalities.

Settlor: __________________________ [SETTLOR NAME] Date: __________

Trustee: __________________________ [TRUSTEE NAME] Date: __________

Witness 1: ________________________ Date: __________

Witness 2: ________________________ Date: __________

Schedule A — initial trust property

Property and identifying details: [EXACT CASH AMOUNT AND DELIVERY METHOD OR COMPLETE ASSET DESCRIPTION]

Estimated value: [AMOUNT] Delivery date: [DATE]

I, the Trustee, acknowledge present receipt of this property.

Trustee: __________________________ Date: __________