Nashville View

First-Party d4A Trusts

Estate Planning Attorneys Serving Nashville and Surrounding Areas

There are many different types of trusts that all have specific purposes, and various types may be appropriate depending on your or a loved one’s needs and interests. Special needs trusts are often set up to benefit individuals with disabilities, who also rely on governmental assistance programs. But there are various kinds of special needs trusts as well, including what is known as a ‘First-Party d4A Trust,’ which may be the right choice for some people. The Nashville estate planning lawyers at Martin Heller Potempa & Sheppard, PLLC help clients explore the various options available and guide them in the steps to take in executing the proper estate plan to fit their needs. MHPS, PLLC is dedicated to providing personalized legal services in all trusts and estates matters. If you have questions regarding establishing a special needs trust, or about any other aspect of estate planning, contact our office today to see how we can assist you.

Establishing First-Party d4A Trusts

Special needs trusts are irrevocable trusts established in order to help an individual qualify for, or continue to receive, governmental benefits like Medicaid, TennCare, Medicare, or Supplemental Security Income (SSI). These trusts allow individuals to designate assets to provide for their care or to pass on to others, while still retaining eligibility for the necessary aid. Special needs trusts can either be third-party or first-party trusts. Third-party trusts are made up of property or money originating from a third party, rather than from the disabled party whom the trust is to benefit. First-party trust assets, however, come from the disabled individual’s own resources.

Furthermore, first-party trusts are divided into two categories. A first-party d4A trust is derived from a federal statute, 42 USC 1396p(d)(4)(A). These trusts are only available for disabled individuals who are under 65 years old. The disabled individual also cannot be the person to establish a first-party d4A trust, but instead it needs to be set up by a parent, a grandparent, or the court. These trusts allow individuals with special needs to put their own assets into a trust while still retaining their qualification for SSI, TennCare, or Medicare programs. Because of the nature of these trusts, the assets are not counted toward the beneficiary’s income when determining their means. Often, first-party d4A trusts are useful for people who have come into a significant but finite sum of money, such as a personal injury lawsuit settlement or inheritance.

First-party d4C trusts, or pooled trusts, are contrasting options for disabled individuals who need a similar structure to retain Medicaid benefits. Pooled trusts are unique in that a nonprofit organization acts as the trustee, instead of an individual or another type of entity. Individuals in a pooled trust remain separate in terms of receiving the necessary funds for their living expenses, but their assets are grouped with others for investing and managing activities. Qualified income trusts, or Miller Trusts, as well as asset protection trusts, can also be used to protect assets from qualifying against income calculations for governmental benefit program purposes.

Seek Guidance from a Knowledgeable Trusts and Estates Lawyer in Nashville

Figuring out which type of trust is right for your loved one or you can be confusing, but it is an important step to ensuring that governmental benefits like SSI or Medicaid are safeguarded. The Nashville attorneys at Martin Heller Potempa & Sheppard, PLLC are dedicated to making sure that you know your options and how various trust types function. We take the time to ensure that you understand each instrument and its benefits, as well as any potential drawbacks that it can have for your family or you. Our firm represents people throughout Williamson and Davidson Counties, including in Franklin, Hermitage, Hillsboro Village, Charlotte, and Sylvan Park. If you would like to learn more about first-party d4A trusts, or if you need assistance with another estate planning matter, contact our attorneys today online or at 615-800-7096.