If an intended beneficiary is a recipient of Medicaid, Social Security Disability, or other governmental assistance programs, an outright gift or a gift in trust may disqualify the beneficiary from continuing to receive such assistance until the trust property is spent down. Trusts can be designed so that distributions are made only to supplement the government assistance. So long as distributions made by the trustee are discretionary and not mandatory, trust assets and distributions are generally not considered disqualifying resources. Trusts authorized by state and federal law can be set up for disabled persons which insulate their own assets and make them eligible for public aid and other government benefits. The downside of this form of Supplemental Needs Trust is that the trust must pay back the government all assistance received to the extent of trust property remaining at the disabled person's death.
Most people specify that it is to take effect in the event of their disability or incapacity.
You can also specify the powers and responsibilities of the agent. If you become incapacitated and you don't have a power of attorney an interested person may have to seek court authority to obtain a guardianship over your financial affairs. A living trust can substitute for a power of attorney because your successor trustee can carry out the functions of a property agent - but only with respect to property held by the trust. A separate power of attorney is advisable. The power of attorney ends at your death unless your agent has power to dispose of your remains.