If you have a loved one with a disability and want to leave them money, you should seriously consider using a Special Needs Trust. The purpose of a Special Needs Trust is to preserve a beneficiary’s right to public benefits, such as SSI or Medi-Cal. A trustee is appointed to provide the beneficiary with things not provided by public benefits.
There are two main categories of Special Needs Trusts with different rules and drafting provisions that depend on who it is that funds the trust. If another person, for example a parent, sets up a special needs trust for a child then it is a third party Special Needs Trust. Special Needs Trusts can be testamentary or stand-alone trusts. The livings trusts we draft for clients provide a back-up provision for a beneficiary’s share to be placed in a special needs trust if necessary; that would be an example of a testamentary Special Needs Trust. A testamentary Special Needs Trust will not exist to assist the beneficiary until after the death of the grantor. However, if someone wants to provide extra support for a disabled loved one prior to their death, or if more than one person will be contributing to a Special Needs Trust, then a stand-alone Special Needs Trust is necessary.
The other category of Special Needs Trust is a first party one. It is created if a person funds a trust with their own money, for example from the settlement of a personal injury law suit. There are very specific rules to create t hose kinds of trusts.
Our firm is well equipped to assist you in carrying out your planning needs by drafting the Special Needs Trust to fit your needs. Contact us online or by phone 310-517-8600. Based in Torrance, our lawyers serve clients throughout Southern California.