WHAT IS A SPECIAL NEEDS TRUST?
The purpose of a special needs trust (also known as a supplemental needs trust) is to hold assets to provide for a disabled person without disqualifying him/her from receiving SSI and Medi-Cal benefits.Special needs trusts can be stand-alone trusts or be contained inside a revocable living trust. 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. This is called a testamentary special needs trust. A testamentary special needs trust will not exist to assist the beneficiary with special needs until after the death of the grantor. So if you want to provide extra support for a disabled loved one prior to your death, then a stand-alone special needs trust is necessary.
SPECIAL NEEDS TRUST TYPES
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. On the other hand, if you are disabled you may want to fund a special needs trust with your own money. An example is if you received a settlement from a personal injury suit and want to put the money into your special needs trust. This is called a first party special needs trust.
Our firm is well equipped to assist you in planning for your or a loved one’s special needs. We invite you to learn about special needs planning services by contacting us online or by phone 310-402-2844. Based in Torrance, our lawyers serve clients throughout Southern California.