A D4A special needs trust (also known as a first-party special needs trust) is a type of trust that is funded with the assets of a person with disabilities who is under the age of 65. The trust is established to provide for the beneficiary’s supplemental care and support while preserving their eligibility for government benefits such as Medicaid and Supplemental Security Income (SSI).

The D4A special needs trust is named after the provision in the federal law that authorizes its creation, which is found in section 1917(d)(4)(A) of the Social Security Act. This provision allows a person with disabilities to transfer their assets into a trust that is specifically designed to provide for their supplemental needs without disqualifying them from receiving government benefits.

The D4A special needs trust can be established by the beneficiary, beneficiary’s parent, grandparent, or legal guardian, or by a court. The trust must also meet certain requirements, such as being irrevocable, having a trustee who is independent of the beneficiary, and providing that any remaining assets will go to the state upon the beneficiary’s death. This last part is known as the Medicaid payback provision.

It is important to note that a D4A special needs trust is subject to certain rules and limitations, and it is recommended to consult with a qualified attorney or financial advisor who is knowledgeable in this area to ensure that the trust is properly established and managed to achieve the intended goals.

Click here to visit RELEP’s Special Needs Planning webpage.