Is a Special Needs Trust Right for Me?

While each special needs child is unique, and every family is unique as well, parents of challenged children share some common concerns and situations, including adjusting routines and expectations for an uncertain future. A parent of a child with special needs has to be more flexible, prepared, compassionate, persistent, and resilient than a parent of a child without special needs.

It should be anticipated that Special needs children may be affected by a parent’s death in a much more profound way and may have difficulty understanding it. It is common for Special needs children to receive regular help from speech therapists, psychologists, and occupational therapists to ensure their success and progress in a world that is sometimes difficult to navigate on their own. Maintaining your child’s therapy and doctor visits as uninterrupted as possible and providing them with the standard of living you desire will ensure their greatest chances of success, even after you’ve passed away. In addition to preserving government benefits, a carefully drafted and funded California a Special Needs Trust (SNT) can help your loved one live a fulfilling life even when you’re not around.

Benefits of a California Special Needs Trust

• Your loved one could lose crucial government benefits if a robust California Special Needs Trust (SNT) is not established. In addition to preserving government benefits, a carefully drafted and funded California SNT can help your loved one live a fulfilling life even when you’re not around.
• A minor child cannot inherit directly from their parents when they are minors, thus the need for a trust to protect their inheritance. Most parents revise their estate plans so that their children inherit assets directly once they are of age. Parents of special needs children should refrain from gifting assets directly to their children at any age as their children are likely to depend on assistance programs (such as Medicaid and SSI) throughout their lives. In California, you should not leave money or property outright to a loved one who has special needs, whether through a Will, Living Trust, or by simply doing nothing. The use of a carefully drafted California Special Needs Trust (“SNT”) is recommended instead.
• Because of laws approving of Special Needs Trusts, the assets of the trust are not considered in determining the eligibility of the beneficiary for needs-based government assistance such as SSI and Medi-Cal. People with disabilities who receive an inheritance, gift, settlement from a lawsuit, or any other windfall are likely to lose their government assistance without a Special Needs Trust.

Types of Special Needs Trusts

In order to determine which type of special needs trust to establish, you must understand how both works.

First Party Special Needs Trusts

First Party Special Needs Trusts are trusts funded with the assets of a person with disabilities who is currently receiving needs-based government assistance or may get it in the future. These assets are likely the result of winning or settling a lawsuit, receiving and unprotected gift or inheritance, or some other windfall such as winning the lottery. Because the assets already belong to that person with disabilities, actions should be taken quickly to insulate these assets from the person with disabilities. First Party Special Needs Trusts are created by the parent, grandparent guardian, or the court. Under a new law that passed in 2016, a disabled person with capacity can now sometimes create his or her own First Party Special Needs Trust. First Party Special Needs Trusts are also sometimes called (d)(4)(A) Trusts or Court Created Disability Trusts.

Third Party Special Needs Trusts

Third Party Special Needs Trusts are funded by the assets of a person other than the person with disabilities, such as a parent, grandparent, sibling, or friend. A Third-Party Special Needs Trust can be incorporated into a Will or revocable living trust. It can also be created as a standalone trust. A standalone trust is most often used where multiple persons will be contributing assets to the trust. An example might be a grandmother leaving an inheritance to her disabled grandson and that child’s parents also leaving an inheritance to him or her. By incorporating a special needs trust into their estate plan, these persons can leave an inheritance for their special needs loved one without fear of loss of needs-based government assistance such as SSI and Medi-Cal.

We Are Uniquely Qualified To Assist You

As a member of the Special Needs Alliance and the Academy of Special Needs Planners, we have the knowledge and experience to provide unique guidance regarding Special Needs Trusts and the intricacies of administering them. Through the establishment of a Special Needs Trust (SNT), you can not only preserve government benefits, you can continue to be an advocate for your special needs loved one when you are gone.

Contact Us

With office locations throughout Southern California, Sandoval Legacy Group, a Division of Holstrom, Block & Parke, offers representation for Estate Planning, Special Needs Planning, Trust Administration, Probate, and Conservatorships in Riverside, San Bernardino, Orange, San Diego, and Los Angeles County.

Call us at (888) 502-2881 or contact us online to schedule an appointment with one of our attorneys.