What is a self-settled trust?
A self-settled trust is a type of trust that is typically used in disability planning law in North Carolina. This trust allows individuals with disabilities to create a trust for their own benefit, including to provide for their own care. The primary purpose of the trust is to allow individuals with disabilities to receive benefits from government programs, such as Social Security or Medicaid, without jeopardizing their eligibility. To use this trust, the person must be considered disabled and must meet certain criteria to create the trust. Funds placed into the trust must be used solely for the benefit of the disabled individual. The trust must be established by a parent, guardian, or other court-appointed fiduciary on behalf of the disabled individual. If the trust is not created properly, the funds may be seized by the government for payment of benefits. It is important to note that the assets placed in the trust are still owned by the disabled individual. However, the trust provides a way to ensure that those assets are not used to disqualify the individual from government benefits. Self-settled trusts also help protect assets from creditors, who cannot take them away to pay off debt. In North Carolina, self-settled trusts are an important legal tool that can help disabled individuals maintain their independence and provide for their own care. A knowledgeable attorney should be consulted to ensure that the trust is properly established and the rights of the disabled individual are protected.
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