A listener sent us several questions about SNTs (that is, special needs trusts). We thought the questions were good, and if we talked about them it would give us a chance to explain a number of things about trusts for people with disabilities.

Broadly speaking, there are two different "flavors" of SNTs. Sometimes the beneficiary's assets fund the trust (those are called "self-settled"). Others are "third-party" (that is, the money comes from someone else -- a family member's estate plan, for example). Those "third-party" trusts generally have more generous rules than their "self-settled" cousins.

When we get questions about SNTs, our answers usually have to be doubled-up. "If the SNT is a self-settled trust, the answer is ..." we might explain. And then: "but if it is a third-party trust, the answer is different."

In order to keep the "Answer A/Answer B" distinction to a minimum, we've decided here to answer all the questions only for third-party SNTs. When we recorded this podcast, it spanned two longer-than-usual sessions. In a third, later, session, we will go back over the same territory but for self-settled SNTs.

A word about terminology: we use "self-settled" and "first-party" interchangeably. We do not believe that there is widespread acceptance of a distinction between "special needs" trusts and "supplemental benefits" trusts, but some use the latter term for one (or the other) of the two types of trusts.

And there are actually four or five other types of special needs trusts to consider. We haven't talked here about pooled trusts, or "Miller" trusts, or "sole benefit" trusts or "Qualified Disability" trusts because they are less common terms, not because they are unimportant. But we'd love to get your questions about those designations for later episodes.