Merced Special Needs Trusts Lawyer
California attorney helps with care of individuals with disabilities
It is a sad reality that the rate of disability in the United States has been on the rise. Conditions affecting mobility and cognition are prevalent in adults, while neurodevelopmental anomalies, such as autism, are being diagnosed more frequently in children. If you are responsible for care of a disabled loved one, you should consider ways to make their financial future a part of your estate planning. A Merced special needs trusts lawyer at Curry and Curry can craft solutions tailored to your family’s circumstances.
What is a special needs trust?
A special needs trust (SNT) is a method of providing financial support for individuals with disabilities. It is a separate legal entity that is owned by a trustee, who is authorized to dispense funds for the beneficiary’s needs, such as for medical equipment, therapy or recreational activities.
Why establish a special needs trust?
An SNT allows families to provide for their loved one’s future while not disrupting their access to programs like Medi-Cal or Supplemental Security Income (SSI). Without an SNT, inherited assets or financial gifts could push a person over resource limits for such programs, causing a loss of benefits. An SNT also offers peace of mind, ensuring that a capable trustee manages funds responsibly.
Types of special needs trusts
California law recognizes these types of SNTs, each suited to specific circumstances:
- First-party — Individuals who acquire assets after becoming disabled, often through an inheritance or personal injury settlement, can fund this type of SNT with their own assets. These trusts must include a provision for reimbursing Medi-Cal payments upon the beneficiary’s death.
- Third-party — This type of SNT is created and funded by someone other than the beneficiary, typically a parent or other relative. It does not require reimbursement of Medi-Cal paybacks, making it a popular choice for family estate planning.
- Pooled — This type of SNT is managed by a nonprofit organization, such as the PLAN of California. It pools assets from multiple beneficiaries for investment purposes while maintaining accounts for individual beneficiaries. It is ideal for people with limited resources or no family.
A California trust lawyer at our firm can recommend the best option for your circumstances.
Who should have a special needs trust?
An SNT is ideal for California residents with disabilities who rely on or may qualify for public benefits like Medi-Cal, SSI or In-Home Supportive Services (IHSS). This includes individuals with developmental disabilities, chronic illnesses or severe physical impairments. Additionally, an adult who receives a sudden windfall, such as a personal injury settlement, may need an SNT to preserve benefit eligibility. Finally, an SNT is an important element of an estate plan for parents of special needs children.
How a special needs trust works
In California, an SNT is established through a legal document that names a trustee and sets forth instructions for managing the trust. The trustee is empowered to disburse funds for the beneficiary’s supplemental needs, such as education, transportation or personal care, while being careful not to advance cash that could disqualify the beneficiary from government benefits. The trust must comply with ever-changing federal and California regulations, including rules on allowable expenditures. Upon the beneficiary’s death, funds remaining in a first-party SNT are first used to repay Medi-Cal, then pass to heirs.
Contact our California estate planning attorneys to discuss special needs trusts
Curry and Curry in Merced assists parents and other relatives with establishing special needs trust for disabled individuals in their care. To schedule a consultation, please call 209-720-3912 or contact us online.
