SPECIAL NEEDS TRUST AGREEMENT

(Utah – Irrevocable, Discretionary Supplemental Needs Trust)

[// GUIDANCE: This template is designed to comply with Utah’s adoption of the Uniform Trust Code (Utah Code Ann. § 75-7-101 et seq.) and with the federal “special needs” safe-harbor at 42 U.S.C. § 1396p(d)(4)(A). Bracketed placeholders MUST be completed and the document reviewed by Utah-licensed counsel prior to execution.]

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Establishment of Trust & Irrevocability
4. Purpose & Distribution Standards
5. Beneficiary Rights & Spendthrift Protection
6. Trustee Powers & Duties
7. Administration; Accountings; Tax Matters
8. Risk Allocation
9. Dispute Resolution
10. General Provisions
11. Execution Block

1. DOCUMENT HEADER

1.1 Title & Parties
This SPECIAL NEEDS TRUST AGREEMENT (“Trust Agreement”) is made effective as of [EFFECTIVE DATE] (the “Effective Date”) by and among:
a. [NAME OF SETTLOR], an individual with an address at [ADDRESS] (“Settlor”);
b. [NAME OF TRUSTEE], with an address at [ADDRESS] (“Trustee”); and
c. [NAME OF BENEFICIARY], born [DOB], residing at [ADDRESS] (“Primary Beneficiary”).

1.2 Recitals
A. Settlor desires to establish an irrevocable trust to provide for the supplemental and extra needs of the Primary Beneficiary, who is a person with a disability as defined in 42 U.S.C. § 1382c(a)(3).
B. The intent of Settlor is to preserve the Beneficiary’s continuing eligibility for means-tested governmental assistance programs, including Supplemental Security Income (“SSI”) and Medicaid, while permitting Trustee to expend trust property to enhance the Beneficiary’s quality of life.
C. Trustee is willing to accept the trust and administer it in accordance with this Trust Agreement and applicable law.

NOW, THEREFORE, Settlor irrevocably delivers to Trustee the property listed on Schedule A (the “Trust Estate”) to be held, managed, and distributed as set forth below.

2. DEFINITIONS

For purposes of this Trust Agreement, capitalized terms have the meanings set forth below:

“Accounting Period” – Each calendar year ending December 31, or such other period selected by Trustee in writing.
“Beneficiary” – Collectively, the Primary Beneficiary and any [CONTINGENT / REMAINDER] beneficiaries described in Section 4.5.
“Government Benefits” – SSI, Medicaid, SNAP, subsidized housing, and any other federal, state, or local mean-tested program existing now or in the future.
“Qualified Disability Expense” – Any expense permitted under 42 U.S.C. § 1396p(d)(4)(A) and relevant program guidance, including but not limited to medical care, therapies, education, recreation, transportation, and personal services that supplement, not supplant, Government Benefits.
“State Medicaid Agency” – The Utah Department of Health and Human Services, Division of Integrated Healthcare, and any successor agency.
“Trust Assets” – All property, tangible or intangible, held in the Trust Estate from time to time.

[// GUIDANCE: Add or delete definitions as needed; ensure each defined term is used consistently.]

3. ESTABLISHMENT OF TRUST & IRREVOCABILITY

3.1 Name. This trust shall be known as the “[BENEFICIARY] Supplemental Needs Trust” (the “Trust”).
3.2 Irrevocability. This Trust is irrevocable upon execution. Neither Settlor nor Beneficiary may alter, amend, revoke, or terminate the Trust except as expressly provided herein or by court order pursuant to Utah Code Ann. § 75-7-411.
3.3 Additional Contributions. With Trustee’s consent, any person may add property to the Trust, provided that such contribution does not jeopardize Beneficiary’s eligibility for Government Benefits. Contributions by Beneficiary or Beneficiary’s spouse may invoke Medicaid “payback” requirements in Section 4.6.
3.4 Separate Trust Property. Trust Assets shall not be deemed available resources to Beneficiary under 20 C.F.R. § 416.1201.

4. PURPOSE & DISTRIBUTION STANDARDS

4.1 Primary Purpose. The Trust’s primary purpose is to provide for the supplemental needs of Beneficiary over and above Government Benefits, consistent with the “sole benefit” requirement under 42 U.S.C. § 1396p(d)(4)(A).
4.2 Standard of Distribution. Distributions are wholly within Trustee’s sole and absolute discretion. Beneficiary has no enforceable right to compel distributions. Trustee shall consider the availability of Government Benefits before making any distribution.
4.3 Prohibited Distributions. Trustee shall not:
a. Make any payment directly to Beneficiary that would be counted as income under SSI rules;
b. Expend Trust Assets for food or shelter unless Trustee determines any resultant reduction in SSI is in Beneficiary’s best interests;
c. Reimburse Settlor or any other person for support legally owed to Beneficiary.
4.4 Permitted Distributions. Trustee may pay vendors directly for Qualified Disability Expenses, including without limitation: therapy, personal care attendants, recreational activities, education, vacations, internet, adaptive equipment, and legal or financial services.
4.5 Remainder Interest. Upon Beneficiary’s death or earlier termination of the Trust:
a. Medicaid Payback (if applicable) – Trustee shall first reimburse the State Medicaid Agency up to the amount of correctly paid Medicaid benefits, unless this Trust is solely funded by third-party assets.
b. [Remainder Beneficiaries] – Any balance shall be distributed to [NAME(S) & PERCENTAGES].
4.6 Trust Termination. The Trust terminates upon the earliest of: (i) exhaustion of Trust Assets; (ii) Beneficiary’s death and final distributions under Section 4.5; or (iii) court-approved termination consistent with applicable law.

5. BENEFICIARY RIGHTS & SPENDTHRIFT PROTECTION

5.1 No Assignment. Beneficiary may not assign, pledge, anticipate, or encumber any interest in the Trust.
5.2 Spendthrift Clause. To the maximum extent permitted by Utah Code Ann. § 75-7-502, Trust interests are protected from creditors and from legal process.
5.3 No Support Obligation. This Trust is intended to be supplemental; it shall not be construed as a resource available for Beneficiary’s support obligations otherwise borne by any governmental entity.

6. TRUSTEE POWERS & DUTIES

6.1 Standard of Care. Trustee shall administer the Trust as a prudent person would, consistent with Utah Code Ann. § 75-7-901, considering the special purposes of this Trust.
6.2 Enumerated Powers. Subject to Sections 4 and 7, Trustee may:
a. Invest and reinvest Trust Assets;
b. Employ professionals and delegate duties as permitted by § 75-7-907;
c. Make distributions in cash or in-kind;
d. Execute documents and perform acts to manage Trust property;
e. Seek instruction from the court when doubt exists.
6.3 Bond & Compensation. Trustee [shall / shall not] furnish bond. Trustee is entitled to reasonable compensation and reimbursement of expenses.
6.4 Successor Trustee. If the office of Trustee becomes vacant, [NAME FIRST SUCCESSOR] shall serve. Additional successors are listed in Schedule B. A successor Trustee shall assume office by written acceptance delivered to Settlor (if living) or Beneficiary.

[// GUIDANCE: Consider corporate fiduciary succession for long-term stability.]

7. ADMINISTRATION; ACCOUNTINGS; TAX MATTERS

7.1 Accountings. Within 60 days after each Accounting Period and upon change of Trustee, Trustee shall provide a written accounting to Beneficiary (or legal representative) and, if required, to the Utah probate court.
7.2 Tax ID & Returns. Trustee shall obtain an EIN and file all required federal and state tax returns. To the extent allowable, Trust income shall be taxed to Beneficiary under IRC § 677(b).
7.3 Allocation of Receipts & Disbursements. Trustee shall follow Utah’s Principal and Income Act (§ 22-3-101 et seq.) unless inconsistent with the special needs purpose.

8. RISK ALLOCATION

8.1 Trustee Indemnification. Trustee and its agents are indemnified from the Trust Assets against any claim, loss, or liability arising from good-faith administration, except for willful misconduct or gross negligence.
8.2 Limitation of Liability. Any liability of Trustee is limited to the extent of Trust Assets; no personal liability attaches.
8.3 Insurance. Trustee may purchase fiduciary liability insurance and charge premiums to the Trust.
8.4 Force Majeure. Trustee is not liable for delay or failure to act caused by events beyond reasonable control, including natural disasters, governmental actions, epidemics, or market disruptions.

9. DISPUTE RESOLUTION

9.1 Governing Law. This Trust and all disputes hereunder are governed by the laws of the State of Utah, without regard to conflict-of-laws principles.
9.2 Exclusive Forum. The Third Judicial District Court, Probate Department (or any Utah state court exercising probate jurisdiction) has exclusive jurisdiction over trust matters.
9.3 Limited Arbitration. Non-probate claims arising out of Trustee’s investment management may, at Trustee’s election, be submitted to confidential arbitration under the Utah Uniform Arbitration Act (§ 78B-11-101 et seq.). Probate matters remain in court.
9.4 Injunctive Relief. Nothing herein limits a party’s right to seek injunctive or declaratory relief from the probate court to enforce trust provisions.
9.5 Attorneys’ Fees. In any proceeding concerning the Trust, the court may award reasonable attorneys’ fees and costs as justice may require and may order such amounts paid from the Trust or personally by a party, consistent with § 75-7-1004.

10. GENERAL PROVISIONS

10.1 Amendments & Reformation. Trustee may petition the probate court to modify or reform this Trust under § 75-7-412 to further the special needs purpose and preserve Government Benefits.
10.2 No Merger. The legal and equitable titles shall not merge while any duties remain to be performed.
10.3 Assignment. Trustee may not assign its fiduciary position except as expressly provided herein or by court order.
10.4 Severability. If any provision is invalid, the remaining provisions remain effective, and the invalid provision shall be reformed to best accomplish the original intent.
10.5 Entire Agreement. This Trust Agreement, including all schedules, constitutes the entire understanding among the parties.
10.6 Counterparts & Electronic Signatures. This Agreement may be executed in counterparts, each deemed an original, and by electronic or facsimile signature to the fullest extent permitted by law.

11. EXECUTION BLOCK

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

NOTARIZATION

State of Utah )
County of ______ ) ss.:

On this ___ day of ____, 20__, before me, the undersigned Notary Public, personally appeared [NAME OF SETTLOR] [and [NAME OF TRUSTEE]], 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: ____

[// GUIDANCE: Utah does not require witnesses for trust execution, but financial institutions may prefer two witnesses. Add lines below if desired.]

SCHEDULE A – INITIAL TRUST PROPERTY

[List cash amounts, securities, real property legal descriptions, etc.]

SCHEDULE B – SUCCESSOR TRUSTEES

1. [NAME FIRST SUCCESSOR]
2. [NAME SECOND SUCCESSOR]

[// GUIDANCE: Include trustee contact information and any special succession conditions.]

IMPORTANT DISCLAIMER: This template provides general information and sample language. It is not legal advice and does not create an attorney-client relationship. Statutes and regulations change; practitioners must verify current law and tailor provisions to specific facts before use.