Special Needs Trusts are imperative for beneficiaries who are disabled and receive some form of government benefits. The beneficiaries of Special Needs Trusts may be either a developmentally or physically disabled minor or adult.
A standard Family Trust may not be appropriate for a Special Needs person because they do not address the specific necessities of the disabled beneficiary, such as governmental programs and benefits. In California, a Special Needs Trust is generally an irrevocable trust that “gives the trustee discretion to supplement… whatever is provided by government programs to the trust’s beneficiary.” Most commonly, Special Needs Trusts allow for an individual with disabilities to benefit from funds in the trust without the funds counting as a financial asset and interfering with the government benefits that the beneficiary may be receiving. Even in rare cases where a beneficiary never needs Federal or State public benefits and services, Special Needs Trusts may still be a valuable tool and can be used as part of a comprehensive plan to meet the special life management needs of the beneficiary.
While the trustee of the Special Needs Trust cannot give money directly to the beneficiary (as it will interfere with eligibility for Medicaid, subsidized housing, Social Security Income and other government services), the trustee may spend the trust assets on a wide variety of goods and services for the benefit of the beneficiary. Typically, trust assets are used to pay for personal care attendants, vacations, physical rehabilitation, and recreation.
Concerned families and people with disabilities no longer need to worry about limited options regarding estate planning. In the past few years, there has been increasing public awareness of the estate planning options available for families with loved ones with disabilities. There has also been an increase in professional advisors who are able to render competent advice and provide their clients with numerous estate planning options, including Special Needs Trusts.
Estate planning is a highly complex area of law. If you are interested in creating a Special Needs Trust or have any questions regarding your current estate plan, please contact the experienced estate planning attorneys at Lonich Patton Erlich Policastri for further information. The attorneys at Lonich Patton Erlich Policastri have decades of experience handling complex estate planning matters, including Special Needs Trusts, and we are happy to offer you a free consultation. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may detail general legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.
Source: Purpose of Special Needs Trust, 3 Cal. Transactions Forms- Est. Planning § 17:1 (2015)