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

A first party special needs trust is created with assets belonging to the primary beneficiary. And because those assets belong to the primary beneficiary those assets will be used to reimburse Medicaid or other public benefits programs at the time of their death. Whatever's left after reimbursement may go to the designated beneficiaries. A third party trust, on the other hand, is funded with someone else's money. Therefore, when the primary beneficiary dies whatever's left will be paid out to the designated beneficiaries in the trust.