What is A Special Needs Trust?

What is A Special Needs Trust?

A Special Needs Trust, or “SNT”, is a legal arrangement in which a financial organization, such as a bank, manages the finances for someone with a disability.  A Special Needs Trust is also commonly referred to as a Supplemental Needs Trust.  The person with the disability is known as the beneficiary and the bank managing the persons finances and/or assets is known as the trustee.  The trust can be comprised of different types of assets, including but not limited to, cash, checks, bonds, personal property, and real estate.

Why is an SNT Important?

An SNT is important for many reasons.  This type of trust allows someone with a disability to have their needs met without having to lose or reduce any benefits they may be entitled to, such as security income, Medi-Cal, HUD assistance, or in-home support services.  The assets that are in the Special Needs Trust will not be counted toward the $2,000 asset limit for the SSI, Medi-Cal, and IHSS benefits.

How Can I Set Up an SNT?

Setting up an SNT can be complicated.  It’s important that you reach out to an experienced attorney to receive the proper advice.  If an individual receives public benefits, the trust should say certain things to make sure the person’s eligibility for the benefits is not altered.  For example, the SNT should have three important points:

  1. that the trustee can decide how and when the funds can be used to benefit the beneficiary,
  2. the trust’s main purpose should be to supplement the services the beneficiary receives, and
  3. the beneficiary cannot sell or give away his or her rights to the trust.

If you have questions about setting up a Special Needs Trust, you should contact an experienced attorney.

f you need the dedicated legal representation for wills, trusts, and estate matters in California, contact the Law Offices of Yacoba Ann Feldman to schedule a consultation.