What is a Special Needs Trust?

A Special Needs Trust is a special trust created for a loved one who is currently receiving or will receive Supplemental Security Income (SSI) and/or Medi-Cal.

Why is there a need for this ?

In order to qualify to receive SSI and/or  Medi-Cal the recipient can only have minimal financial resources.  That means if you leave an inheritance to the person, he can be at risk of losing his SSI or Medi-Cal benefits.  So, although your intentions are good, you must plan very carefully. Otherwise, you may disqualify the person from the benefits they are receiving.

You can use a Special Needs Trust or Supplemental Needs Trust which allows you to leave the inheritance to the person without jeopardizing your loved one’s benefits. They will continue to receive their benefits and have their inheritance as well.

You will need to choose someone to serve as trustee. The Trustee will have complete discretion over the inheritance and will be in charge of spending money on your loved one’s behalf. The key is that your loved one (the beneficiary) has little to no control over the assets in the trust. Because they have no control they continue to be eligible for government benefits.  If the beneficiary no longer needs the government benefits, you can set up the trust to terminate and distribute the assets outright to your loved one.

For Example

You name Ben’s uncle as the Trustees of Ben’s Special Needs Trust.  At your death, Ben’s trust will get your inheritance.  Ben’s uncle will be in charge of using the money for Ben’s benefit. They will have discretion to use the money as they see fit. Ben will continue receiving his government benefits and have the inheritance available for his supplemental use when needed.

A Special Needs Trust is for individuals with permanent or temporary special needs or disabilities. It’s also for beneficiaries who are currently receiving government benefits or those who may receive government benefits in the future.

Contact our office to schedule a free consultation and obtain more information.

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