Payback Trusts

A life-enhancing trust you can grow over time.

Payback Trust (also known as a (d)(4)(A) trust) enables a person with a disability to protect his or her assets if they receive an inheritance or lawsuit settlement, while still preserving their eligibility for essential lifelong supports.
An individual with a disability under 65, their parent, grandparent or legal guardian can establish this trust. The court can also establish a Payback Trust.

If an individual with a disability will receive funds in their name, particularly as a result of a personal injury or a malpractice settlement, a Payback Trust could be the solution. Assets in the Payback Trust are used for the sole benefit of the individual with a disability to improve his or her quality of life. If all the funds in the Payback Trust have not been spent by the time the individual with a disability passes away, the remaining funds are first used to “pay back” the state(s) for the cost of providing Medicaid services to the individual.

Following this payback, any remaining funds are distributed according to the trust document. Beneficiaries can leave these funds for family members, friends or charitable organizations.

  • Achieva Family Trust adds valuable social service expertise to the traditional role of a corporate trustee.
  • An individual with a disability can place his or her assets in the trust and avoid unnecessary spend down.
  • If the trust is large enough to provide for all the supplemental needs of the individual with a disability and a complete payback to the state(s) that have provided Medicaid services, the beneficiary can leave any remaining funds to other family members, friends, charities, etc.
  • First, we'd encourage you to contact us to better learn how to get started opening a Payback Trust.
  • Then, if you are opening a Payback Trust, you'll start by contacting an attorney familiar with drafting special needs trusts. You can start by looking at our Attorney List.

Resources

PA Attorneys Familiar With Special Needs Trusts

List of PA attorneys familiar with special needs trusts.

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Payback Trust Fact Sheet

This Payback Trust fact sheet can help you determine if a Payback Trust is right for you. It covers what a Payback Trust is, the advantages of a Payback Trust, and the requirements of a Payback Trust.

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Types of Trusts Fact Sheet

Achieva Family Trust offers three types of trusts: Pooled Trust, Payback Trust, and Third Party Trust. This fact sheet details the details and benefits of each type of trust.

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Do you have questions or want more information? Get in touch with us.

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