Thursday, June 2, 2011

Payback Trust



The Payback Trust is a second type of trust that can be established for a disabled family member. This type of trust is different from the Third-party funded trust discussed in the prior post.

The Payback Trust as the name implies is a trust created from the funds of a disabled beneficiary and requires payback, at death, to the state for medical assistance benefits. However, during ones lifetime, funds may be accessed within designated limitations. Generally, these trusts are created to hold the proceeds from personal injury or medical malpractice settlements to allow the disabled beneficiary to continue to receive medical assistance. The trust must be created as an irrevocable trust for the sole benefit of the disabled individual under the age of 65. Such trust can be created by the disabled individual, his/her parent, guardian or order of the court.

Tomorrow we will discuss a thrid type of trust used for those with disabilities. Contact us at http://www.ythlaw.com/ for expert estate planning advice.

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