Revocable living trust for developmentally disabled child—Parents as settlors.

Trust agreement made _________[date], between _________ and _________[parents] of _________[address], _________[city], _________ County, _________[state], referred to settlors, and _________, referred to as trustee.

In consideration of the mutual covenants and promises set forth, settlors and trustee agree:

SECTION ONE.

TRUST ESTATE

Settlers hereby transfer and deliver to trustee, in trust, the property set out in Exhibit _________, attached and incorporated by reference. Receipt of such property is hereby acknowledged by trustee. Such property, and any other property subject to this trust, shall constitute the trust estate, and shall be held in trust for the uses and purposes expressed in this instrument and shall be subject to the conditions of the trust.

SECTION TWO.

BENEFICIARIES

The primary beneficiary of this trust shall be _________. The secondary beneficiaries of this trust shall be and _________.

SECTION THREE.

INTRODUCTION

It is settlors' primary concern in drafting this trust that it continue in existence as a fund supplementing public assistance for the life of settlors' developmentally disabled child, _________[name of primary beneficiary] in the same manner as settlors would provide if personally present. Currently, there exists basic living needs such as _________[for example: dental care and outdoor recreation] which are not met by public benefit programs for the developmentally disabled. It is important that settlors' child continue to have access to these programs in order to maintain a level of human dignity and humane care. If this trust were to be invaded by creditors, subjected to any liens or encumbrances, or if it were to cause public benefits to be terminated, it is likely that the trust corpus would be depleted prior to the child's death, especially since the cost of normal, non-emergency care for developmentally disabled persons is so high. In this event, there would be no funds available for emergency needs or to supplement basic necessities. The following trust provisions should be interpreted in light of these concerns and settlors' stated intent.

SECTION FOUR.

SPECIAL NEEDS DISTRIBUTION

A. Trustee shall pay to or apply for the benefit of settlors' child, _________, the primary beneficiary for life, such amounts from the principal or income, up to the whole, as the trustee, in its sole discretion, may from time to time deem necessary or advisable for the satisfaction of that child's special needs. Any income not distributed is to be accumulated and added to principal. As used in this instrument, the term "special needs" refers to the requisites for maintaining the beneficiary's good health, safety and welfare when, in the discretion of the trustee, such maintenance is not provided by any public agency, office or department of _________[state] any other state, or the United States. "Special needs" include, but are not limited to, medical and dental expenses, clothing and equipment, programs of training, education and treatment, and essential dietary needs.

B. Because their child, _________, the primary beneficiary, is developmentally disabled and unable to maintain and support _________[himself or herself] independently, settlors intend that the trustee, in the exercise of its best judgment and fiduciary duty, seek support and maintenance for their child from all available public resources, including Supplemental Security Income (SSI), _________[state medical assistance program], Social Security Disability Insurance (SSDI), and the appropriate Regional Center for the developmentally disabled. In making distributions for special needs, the trustee must take into consideration the applicable resource limitations of the public assistance program. In carrying out the provisions of this article, the trustee shall be mindful of the probable future needs of the remainderman of this trust.

C. No part of the corpus of this trust is to be used to supplant public assistance benefits of any county, state, federal or other governmental agency that has a legal responsibility to serve persons with disabilities which are the same or similar to those of the primary beneficiary. For purposes of determining the primary beneficiary's eligibility for any such benefits, no part of the principal or undistributed income shall be considered available to the beneficiary. In the event the trustee is requested to release principal or income of the trust to pay for equipment, medication or services which any state or federal agency is authorized to provide (were it not for the existence of this trust), or in the event the trustee is requested to petition the court or any administrative agency for the release of trust principal or income for this purpose, the trustee is authorized to deny the request. The trustee is further authorized, in its discretion, to take whatever administrative or judicial steps that may be necessary to continue the eligibility of the beneficiary for any such benefit. Such steps include obtaining instructions from a court of competent jurisdiction and obtaining a ruling from such a court that the trust corpus is not available to the primary beneficiary for eligibility purposes. Any expenses of the trustee incurred to such end, including attorney fees, are a proper charge to the trust estate.

D. No interest in the principal or income of this trust is to be anticipated, assigned, or encumbered, or subject to any creditor's claim or legal process, until it is actually received by the beneficiary. Furthermore, settlors declare that it is their intent that this trust is to be conserved and maintained primarily for the special needs of their developmentally disabled child. To such end, no part of the corpus of this trust, principal or undistributed income, is to be construed as part of the primary beneficiary's "estate" or be subject to the claims of voluntary or involuntary creditors for the provision of care and services, including residential care, by any public entity, office, department or agency of _________[state] any other state, or of the United States, or any other governmental agency.

SECTION FIVE.

DISTRIBUTIONS TO SECONDARY BENEFICIARIES

A. So long as all individuals in the group consisting of _________ and _________[secondary beneficiaries] remain alive, the trustee may, from time to time, pay to or apply for the benefit of any one or more of them as much of the income and principal of the trust estate as the trustee in its discretion deems appropriate for their comfortable support and maintenance. The trustee is to first take into consideration the following factors: (i) Any other income or resources; (ii) Their ability to earn and provide their own living; (iii) The degree of need occasioning the request.

B. It is settlors' intention to provide by this trust first for the needs of _________, the primary beneficiary, and then for the secondary beneficiaries pursuant to the above provisions. Trustee is to administer this trust accordingly.

C. In making payments to the primary and secondary beneficiaries pursuant to the above provisions, the trustee may pay more or apply more for the benefit of some beneficiaries than others, and may make payments to or applications of benefits for one beneficiary to the exclusion of the others. Any income not distributed must be accumulated and added to principal.

D. Notwithstanding anything to the contrary contained in other provisions of this trust, if the existence of this trust has the effect of rendering the primary beneficiary ineligible for Supplemental Security Income (SSI), _________[state medical assistance program], or any other public benefit program, the trustee is authorized, but not required, to terminate this trust. In such case the trust estate is to be distributed, free of trust, to the secondary beneficiaries then living, share and share alike. It is settlors' wish that the secondary beneficiaries conserve, manage, and distribute the proceeds of the former trust estate for the benefit of _________[primary beneficiary] in accordance with paragraph 3A of this trust, ensuring that _________[he or she] receives sufficient funds for basic living needs when public assistance benefits are unavailable. This request is precatory, not mandatory. In determining whether the existence of the trust has the effect of rendering the primary beneficiary ineligible for SSI, _________[state medical assistance program], or other public benefit programs, the trustee is granted full and complete discretion to initiate either administrative or judicial proceedings, or both. All costs incurred as a result of such proceedings, including attorney fees, shall be a proper charge to the trust estate.

E. In the event that any of the secondary beneficiaries of this trust do not survive settlors or predecease _________[primary beneficiary], the trust estate shall be held, administered, and distributed for the benefit of the surviving primary and secondary beneficiaries, in accordance with these provisions.

SECTION SIX.

TRUST TERMINATION

This trust shall terminate on the death of _________[primary beneficiary]. Thereupon, trustee shall distribute free of trust the remaining balance of the trust estate to any issue of _________[primary beneficiary], by right of representation. If _________[primary beneficiary] leaves no issue, the remainder shall go to settlors' then-living issue, by right of representation.

SECTION SEVEN.

PAYMENT OF EXPENSES

Upon the death of _________[primary beneficiary] the trustee may pay any inheritance, estate, or other death taxes that may be due as a result of assets passing in accordance with these trust provisions or otherwise, all expenses of the primary beneficiary's last illness and funeral, and expenses related to administration and distribution of the trust estate if, in the trustee's discretion, no other satisfactory provisions have been made for payment. The trustee is to make no payments for obligations incurred for the beneficiary's health, support, and maintenance if the trustee determines, in its discretion, that payment therefor is the obligation of any county, state, federal or other governmental agency which has the responsibility of serving persons with disabilities which are the same or similar to those of the primary beneficiary.