What is a discretionary trust?

A discretionary trust is a type of trust used in disability planning law in Texas. It enables a disabled individual to use trusts to manage money and other assets. The trustee of the trust, which can be the disabled individual themselves, can use money or assets for the benefit of the disabled individual. Funds in a discretionary trust are generally excluded from the means test when applying for Medicaid and other public assistance programs. Discretionary trusts are often used for disability planning to protect assets, while at the same time maximizing eligibility for public assistance. However, it is important to note that discretionary trusts may be subject to the “spend-down” rule in Texas, meaning that assets must be spent before qualifying for public assistance. It is important to work with a lawyer to set up a discretionary trust to ensure that it is properly administered and that assets are protected. A discretionary trust is just one tool in disability planning law in Texas. It can be a useful way to protect assets and maximize eligibility for public assistance, but it is important to make sure that the trust is set up correctly and that any relevant laws are followed.

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