January 2023
A lot of confusion exists as to whether a special needs trust must pay monies remaining in the trust at its termination to the State to reimburse the State for Medicaid paid on behalf of the beneficiary during his life. Any such payback would only be at the trust’s termination, which is typically at the death of the beneficiary. While some special needs trusts do have this Medicaid payback, others do not. In fact, there are different types of special needs trusts which are used in different situations, and it is important to determine which type of trust is appropriate for your needs.

The major difference between the types of special needs trusts, and the reason why some trusts have a payback and others do not, depends upon where the money is coming from that goes into the trust. There are two main types. A first-party, payback special needs trust is funded only with monies of the beneficiary’s own. A third-party, non-payback, special needs trust can be funded with monies of anyone in the world except the beneficiary. While both trusts protect eligibility for public benefits, they are used in very different situations.


“The firm was highly recommended by my financial advisors and they certainly sent us to the right place. McAndrews Law has a very welcoming environment and we had such a strong connection with our attorney, Lesley Mehalick. Thank you!” 


“Lesley and all of the staff at McAndrews Law were very caring, patient and willing to answer even the most confusing questions!” 


“Lesley, thank you for being so understanding towards me, and for all that you have done in helping set up my Special Needs Trust. You have helped change my life for the better, and I will be forever grateful of that.” 


“Lesley has always made us feel at home. She is very personable and caring in her approach.” 



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