Special Needs Trusts Attorneys Serving Southern California

Facing the future when caring for someone with special needs requires thoughtful planning and a deep understanding of their unique life circumstances. At Bochnewich Law Offices, we recognize the profound responsibility you carry. Our empathetic and experienced attorneys can help you craft special needs trusts that are tailored to protect and uphold the dignity and quality of life of your loved ones, offering the specialized guidance you deserve. 

A special needs trust, also referred to as a supplemental needs trust, is a legal tool that enables individuals with disabilities to receive financial assistance without jeopardizing their eligibility for government benefits. These trusts are designed to supplement, not replace, the government benefits they receive. By establishing a special needs trust, individuals with disabilities can ensure their financial needs are met while still qualifying for essential programs such as Medicaid and Supplemental Security Income (SSI). 

Types of Special Needs Trusts 

There are three primary types of special needs trusts, and we can guide you in determining which is the most appropriate for your unique situation: 

A first-party special needs trust is funded with the disabled individual's assets, like an inheritance or personal injury settlement. This type of trust allows the individual to retain their eligibility for government benefits while using the trust funds for supplemental expenses.  

A third-party special needs trust is established and funded by someone other than the disabled individual, such as a parent or grandparent. This trust enables the family to provide financial support for the individual without affecting their eligibility for government benefits.  

Lastly, a pooled special needs trust is managed by a non-profit organization and combines the assets of multiple individuals with disabilities. While the funds are invested together, each individual has a separate account. 

Who Needs a Special Needs Trust? 

Special needs trusts are vital tools for individuals with disabilities who want to manage their assets without compromising their eligibility for crucial government benefits. The ideal candidates for a special needs trust include: 

• Individuals Receiving Government Aid: Those who currently receive benefits from programs like Medicaid or SSI and aim to preserve their eligibility while receiving additional financial support. 
  

• Recipients of Inheritance or Settlements: Individuals with disabilities who are beneficiaries of an inheritance, life insurance policies, or personal injury settlements can funnel these assets into a special needs trust to prevent disqualification from important government assistance. 
  

• Those Anticipating Future Needs: Individuals who may not currently be on government aid but could require such support in the future. Establishing a special needs trust preemptively safeguards against future disqualification. 
  

• Minors With Disabilities: For parents or guardians of minors with disabilities, setting up a special needs trust can help ensure the child will continue to receive the necessary support and care without jeopardizing future access to government benefits.

This strategic estate planning tool is essential for individuals with disabilities to help them maintain a quality of life that meets their unique needs and retain their eligibility for governmental assistance. 

Legal Requirements for Setting Up a Special Needs Trust 

Establishing a special needs trust in California requires adherence to specific legal requirements to ensure the trust properly serves its intended purpose. First, the trust must be irrevocable, meaning it cannot be modified or terminated without the beneficiary’s permission. This is crucial for maintaining the beneficiary's eligibility for public assistance programs.  

Second, the trust documentation must explicitly state that the trust is established to provide supplemental support to the beneficiary, without substituting for government benefits. It should detail the types of expenses it can cover, which generally include education, healthcare not covered by Medicaid, personal care attendants, and recreational activities. 

Additionally, for a first-party special needs trust, California law requires the beneficiary to be under the age of 65 when the trust is established and that they are legally classified as disabled according to the Social Security Administration’s criteria. Upon the death of the beneficiary, any remaining assets in a first-party trust must first be used to reimburse the state for any Medicaid benefits the beneficiary received. 

For third-party special needs trusts, there is no age restriction for the beneficiary, and the trust does not require a payback provision to the state upon the beneficiary’s death. This makes it a popular choice for parents setting up a trust for a child with disabilities. 

Choosing a Trustee 

When setting up a trust, it is critical to appoint a reliable trustee who understands the legal requirements related to special needs trusts and the specific needs of the beneficiary. This can take the form of a professional trustee, such as a bank or trust company, or a family member of close friend. The trustee is responsible for managing the trust assets and making financial decisions that are in the best interest of the beneficiary, complying with both state and federal laws to preserve the beneficiary’s eligibility for public assistance.  

At Bochnewich Law Offices, we recommended consulting with a legal professional experienced in special needs trusts to ensure you comply with all the regulatory requirements and to adapt the trust to the unique needs of the beneficiary. 

Benefits of a Special Needs Trust 

A special needs trust offers numerous benefits for individuals with disabilities and their families. These trusts preserve the disabled individual's eligibility for government benefits and allow for supplemental expenses and protected assets. With a special needs trust, you can rest easy knowing that your loved one's financial future is secure. 

Remember, a special needs trust can allow individuals with disabilities to retain their eligibility for government benefits. Without an appropriately structured trust, receiving a substantial inheritance or a personal injury settlement could lead to the loss of these essential benefits. 

Additionally, a special needs trust can also cover a broad spectrum of expenses that improve the quality of life for individuals with disabilities. These expenses can span medical and dental care, therapy and rehabilitation services, education and vocational training, transportation, assistive technology, and recreational activities. 

Meticulous Management and Administration 

Administering a special needs trust demands meticulous attention to detail and continuous administration. Our team of attorneys is proficient in the intricacies of trust administration and will ensure that the trust is adequately funded, investments are managed prudently, and distributions align with the beneficiary's needs and the trust's terms. 

We acknowledge that the needs of individuals with disabilities can evolve over time. Our attorneys will collaborate closely with you to review and update the trust as necessary, reflecting any changes in circumstances or laws that may affect the trust's efficacy.