Special Needs Trusts

An OBRA ’93 Payback Trust is a special needs trust that is created with the assets of a disabled beneficiary for the benefit of that individual.  These trusts are often funded with personal injury or workers compensation settlements that leave an individual disabled or when a disabled individual receives an outright inheritance.  The funds in this type of trust are used to supplement but not replace governmental benefits.

 

In order to be eligible for this type of trust, the beneficiary must be under the age of 65 and disabled.  Disability is determined under the Social Security Administration definition for the purposes of Supplemental Security Income and Medicaid qualifications.  OBRA 93’ Disability Payback Trusts must also be irrevocable and any liens from the Department of Human Services must be paid.  Because these types of trusts are funded with a beneficiary’s own money, the funds in the trust are payable to the government when the disabled individual dies.