payback provision means: This is a phrase that describes a clause in special needs trusts which, upon death, requires trust to pay Medicaid any remaining trust funds. The purpose of a special need trust is to hold aside money that can’t be used as income or assets for purposes of SSI and Medicaid disbursement calculations. However, trusts may have additional restrictions based on the funds used. If the beneficiaries were to receive the money used for the establishment of the special need trust, then the trust instrument must contain a payment provision. No payback provisions are necessary if the funding came from a third party. (in Legal Dictionary)
What else does payback provision mean?
- California law does not require a paymentback clause if the trust is irrevocable. 22 Cal Code Reg SS 50489.9b1. California also includes provisions for payback in lawsuit special needs trusts and substituted judgement special needs trusts. Special needs trusts that have a beneficiary younger than 65 years old are covered by California. (in Legal Dictionary)