As noted in § 1.05, most SNTs, especially first-party or
self-settled SNTs are drafted as irrevocable trusts. Presumably this is to
satisfy 42 U.S.C. § 1396p(d)(4)(A) that requires such self-settled trusts to be
"established for the benefit of such individual," the argument being
that if the trust were revocable, the grantor could revoke the trust or utilize
its assets for the benefit of someone other than the beneficiary.
Unfortunately, an uncritical analysis of this strategy leads
many drafters (and even more unfortunately, some interpreters), to the
conclusion that because the trust is irrevocable it is un-modifiable and as a
result the beneficiary and the trustee are locked into the trust's (supposedly)
immutable provisions, regardless of whether those provisions are appropriate to
the present circumstances. However, in the case of an existing trust, whether a
SNT or another irrevocable trust that ought to have been created as a SNT, this
is not true. Proper drafting at the outset can obviate the draconian
consequences of irrevocability" equaling "unmodifiable"
and, where necessary, current trust law in most jurisdictions establishes
statutory bases upon which interested parties can obtain judicial relief.
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Fundamentals of Special Needs Trusts.
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Fundamentals of Special Needs Trusts
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