Nashville View

Third-Party Trusts

Estate Planning Attorneys Serving the Nashville Area

When a child or loved one is disabled and unable to care for themselves, a family member may choose to provide for them in their estate plan. There are various types of special needs trusts that may be established so that a disabled beneficiary receives proper treatment during your lifetime and beyond. The Nashville estate planning lawyers at Martin Heller Potempa & Sheppard, PLLC assist people with setting up third-party trusts or other appropriate instruments to meet their specific goals and serve their family’s interests.

Our attorneys work with each client to identify their objectives and needs, as well as going over each option available so that they can make informed decisions. We offer personalized legal services for all types of trusts and wills matters to clients throughout Tennessee. If you have questions regarding the execution of a special needs trust, or if you would like assistance with another estate planning issue, contact our office today to talk to an attorney and learn more about our services.

Establishing Third-Party Trusts

Special needs trusts are a type of irrevocable trust that, once established, may not be altered by the person who created it, known as the trustor. These trusts contain assets to be used for the care of a disabled beneficiary, without affecting that beneficiary’s ability to receive the governmental assistance to which he or she is entitled. Medicaid, TennCare, or Supplemental Security Income (SSI) benefits are distributed based on a claimant’s income and need. Therefore, if a large sum of money is indicated as belonging to that claimant, there could be issues regarding eligibility. However, assets placed in special needs trusts do not go toward income calculations.

Special needs trusts can either be third-party trusts or first-party trusts. Third-party trusts are created as part of a larger estate plan established by an individual, allowing him or her to provide for a loved one by transferring assets, or life insurance proceeds, to the trust upon the trustor’s passing. These trusts can be created through language in a trustor’s will, as a living trust, or as a stand-alone trust set up for the beneficiary directly. Third-party trust assets are derived from the property of an individual other than the named beneficiary. In contrast, a first-party trust contains assets from a beneficiary’s own resources, such as those acquired from an inheritance or a personal injury settlement or award.

Third-party trusts can be set up independently or “pooled,” similar to how first-party special needs trusts are classified as either First-Party d4A or First-Party d4C trusts based on that characteristic. A pooled trust names a nonprofit organization as its trustee, rather than a specific individual or entity with the sole responsibility of managing that one trust. Instead, the nonprofit entity oversees the assets of many different trusts for the purposes of investment and management. However, individual beneficiaries are still able to receive their own distributions necessary for their care. Deciding which type of trust is right for your loved one and you requires knowing more about the benefits of each of them. A knowledgeable and experienced estate planning attorney can help you determine an appropriate plan that suits your needs.

Receive Advice from a Nashville Attorney Concerning a Third-Party Trust

Making sure that a loved one receives sufficient care after you are gone is one of the biggest concerns that a person may have, especially when that loved one relies on Medicaid or Medicare, and your actions could affect those benefits. The estate planning attorneys at Martin Heller Potempa & Sheppard, PLLC focus on both the larger issues as well as the details necessary to make sure that each client’s estate plan is established to his or her satisfaction. MHPS, PLLC offers dedicated legal representation to clients throughout Williamson and Davidson Counties, including in Nashville, Franklin, Belle Meade, Sylvan Park, and Green Hills. If you would like to learn more about setting up a third-party trust, or you need legal guidance with another trust or will issue, contact our office at 615-800-7096 or online to discuss your options.