Who typically funds a third-party self-settled trust?

A third-party self-settled trust is structured so that someone other than the beneficiary is the one who funds the trust. In this scenario, a family member or another individual contributes assets to the trust on behalf of the beneficiary. This type of trust is often utilized for individuals with disabilities or those needing help managing their finances while still allowing them to qualify for certain government benefits.

This arrangement ensures that the beneficiary can receive benefits since the assets held in a third-party self-settled trust are generally not counted as the beneficiary's resources, which may be critical for maintaining eligibility for programs like Medicaid. By having a family member or another third party provide the funding, it maximizes the financial support for the beneficiary while minimizing potential eligibility issues.

The other options show funding scenarios that do not correctly define who typically funds this type of trust. For instance, if the beneficiary themselves were funding the trust, it would typically be classified as a self-settled trust, leading to different legal implications regarding the assets and eligibility for benefits. Similarly, funding by the trustee or state government agencies would not align with the purpose and structure of a third-party self-settled trust, where the intent is for private citizens to support the beneficiary without the funds being counted as part