What is the difference between a first party special needs trust and a third party special needs trust?

A first party special needs trust is established by the person with the disability, and funded using money already in the child’s own name (usually from a settlement or inheritance).  A third party special needs trust uses funds from a third party, such as a parent, who leave the child money through the special needs trust, rather than to the child in their individual name.  The major difference between these two trusts, other than the source of funds, is that the first party special needs trust has a ‘payback provision’, meaning any money left in that trust at the end of your child’s lifetime will need to payback the government for benefits received, whereas there is no payback provision for third party special needs trusts, and the creators of the trust can choose where remaining money should go at the end of their child’s lifetime.