Special Needs Trusts in California

When you have a loved one with special needs, your estate plan may be more complex than a standard estate plan. Special needs trusts are something very important to individuals who have a loved one with special needs. These trusts are excellent tools that help ensure your loved one will be cared for upon your passing. If you are considering establishing a special needs trust, here are some of the questions you may have:

What is the purpose of a special needs trust?

Special needs trusts are created for beneficiaries of a trust to benefit from certain supplemental resources without discontinuing his or her eligibility for government programs and public benefits. Most often, the government programs available will be Medi-Cal and Supplemental Security.

Are there different kinds of special needs trusts?

There are three different types of special needs trusts available to individuals in California. They are as follows:

  • Third-Party Special Needs Trusts: These trusts are created by another person for a beneficiary. Generally, these trusts are funded through life insurance, and they may be created either during a lifetime or at the time of death. Additionally, family members may contribute gifts toward these trusts.
  • First-Party Special Needs Trusts: These trusts can only be created by a parent, grandparent, or legal guardian, and may only be funded by the beneficiary’s funds. For eligibility, the beneficiary has to be under the age of 65. These types of trusts are irrevocable. Generally, first-party special needs trusts are created when a beneficiary is to receive or inherit funds through a lawsuit or settlement.
  • Pooled Special Needs Trusts: Several members will pool their assets into a larger investment fund. However, to qualify, a disability must be proven, and the trust must be developed through a nonprofit organization.

How does a special needs trust function?

Special needs trusts are designed to help families avoid probate, cover their funeral arrangements, provide supplemental funds, and protect government benefits, as all the assets belong to the trust. Additionally, special needs trusts help your loved one with special needs receive the government-issued benefits he or she needs to go in living a happy, worry-free life. Some of these benefits can include Medi-Cal Supplemental Security Income, HUD housing assistance, In-home support services, and more.

Contact our experienced California firm

Working with an experienced estate planning attorney, such as Jaci Feldman of the Woodland Hills, California, Law Office of Yacoba Ann Feldman, will ensure that you are taken care of when you need it most. Do not delay. Estate planning is a more urgent matter than you may think. You never know what the future holds. Contact The Law Offices of Yacoba Ann Feldman to schedule a consultation today.

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