Estate Planning Blog

Folsom Special Needs Lawyer: Basics of a Special Needs Trust

September 25, 2016

For families with special needs individuals, ensuring the care for their loved ones once the caretakers are gone is of the utmost priority. The loss of specialized care and Medi-Cal or SSI benefits is a very real danger if proper special needs planning is not put in place, which is why Folsom special needs lawyers often share the benefits of special needs planning involving Special Needs Trusts.

What is a Special Needs Trust?

Since even a small amount of cash assets can disqualify special needs individuals from the care and assistance they need, it is important to not let these assets pass directly to them upon your passing. A Special Needs Trust, also called a Supplemental Needs Trust, is the best way to ensure your special needs loved one keeps their care and assistance while also benefiting from the legacy you leave behind. Folsom special needs lawyers design these Trusts in such a way that the assets in it do not belong to your special needs beneficiary; instead, they are owned by the Trust and managed by a Trustee of your choosing who will direct the assets to be used for the benefit of your special needs loved one. Medi-Cal and SSI will ignore the assets in the Special Needs Trust as they are not directly owned by your special needs loved one.

How may the assets in a Special Needs Trust be spent?

Assets in a Special Needs Trust can be spent in a number of ways which benefit the special needs individual. These include education, recreation, vacations, home improvement, and certain out-of-pocket medical expenses. These expenses are considered “non-countable” by Medi-Cal and SSI since they do not count as the special needs individual’s personal assets. There are certain things the Trust cannot be used for and Folsom special needs attorneys caution that assets in a Special Needs Trust may not be given directly to the special needs individual, as this will oftentimes disqualify them from receiving state assistance.

What if I don’t have a Trustee or I’m not leaving behind a large sum of money?

In cases where a suitable Trustee cannot be chosen or a small or moderate sum of money is being left behind, Folsom special needs lawyers often direct their clients towards Pooled Trusts. Pooled Trusts are typically run by non-profits which manage the assets for special needs individuals. The non-profit will assign a Trustee who is responsible for managing the assets on behalf of the special needs individual; the benefit of such an arrangement is that the Trustee and the non-profit are both heavily involved in the special needs community and understand the care and compassion needed to look after your special needs loved one. While there are fees and different types of services attached to Pooled Trusts, they are often a good alternative to an individual Special Needs Trust in certain situations.

If you have any questions about how a Special Needs Trust can benefit you and your loved ones, please contact us at (916) 241-9661 to schedule a consultation.

Call The Chubb Law Firm today at (916) 241-9661 to review your goals and discuss your options.

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