What is a Payback Trust?

A 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.

Who can open this trust?

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.

How does it work?

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.

Advantages

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.

Taylor

Taylor has severe, life-long physical and cognitive impairments because of an injury at birth. Her parents didn’t know if their child would ever have the opportunities other children have. Her family worked with a local malpractice attorney, and Taylor was awarded medical malpractice settlement funds that were placed in a Payback Special Needs Trust for her benefit with the help of ACHIEVA Family Trust.

Why Special Needs Trust?
Taylor has had several surgeries, and needs a wheelchair and other special equipment. Without the special needs trust, the funds from Taylor’s settlement would disqualify her for government support.

“I don’t know what we would have done had it not been for ACHIEVA Family Trust. We would give anything for our daughter, and having their support has meant the world to our family.” –Peter, Taylor’s father

Read Taylor's story