A First Party Special Needs Trust is specifically designed to benefit a person with a disability who receives an inheritance, settlement, personal injury award, or a large gift outright. Without proper planning, receiving such funds directly can jeopardize the disabled individual's eligibility for public benefits like Medicaid or Supplemental Security Income (SSI). Placing these funds into a First Party Special Needs Trust helps preserve eligibility because the trust protects the funds from being counted as the beneficiary's resources. However, it's important to note that with all First Party Special Needs Trusts, Medicaid is entitled to seek a payback for the costs of services and care provided to the beneficiary from any remaining funds in the trust upon the beneficiary's death. 

         Whenever possible, it is preferable to establish a Third Party Special Needs Trust, as Medicaid cannot seek payback from these trusts. Third Party Special Needs Trusts should be set up before the disabled individual receives any gifts or inheritances. However, if the disabled person has already received a gift or inheritance outright, then a First Party Special Needs Trust is the best alternative to maintain eligibility for public benefits. 

          Planning ahead can result in tremendous advantages, so it is essential to consult with an attorney to determine which type of trust is most appropriate for your circumstances and goals.