Special Needs Planning

Special Needs Trusts

Special Needs Trusts, sometimes referred to as Supplemental Needs Trusts, are a type of trust that are created for persons with disabilities who are or may in the future be receiving needs based benefits such as Supplemental Security Income, Medi-Cal and Medicaid. Needs based benefits are usually only available to those with very limited assets and income (typically less than $2000 in assets).

By utilizing a Special Needs Trust in Estate Planning, for persons with disabilities, assets that would otherwise need to be spent down to continue receiving needs based benefits can be preserved for future use to supplement the care and enhance the life of the person with a disability. There are many basic supplemental goods and services that will greatly enhance the life of a person with a disability, that will not be paid for by needs based public benefits. For example, Medi-Cal no longer covers the dental and vision care of an individual that is not institutionalized. The cost of a lifetime of dental and optical care and services without the assistance of insurance can be great and can have an impact upon the quality of life and health of an individual.

There are two types of Special Needs Trusts, First Party Special Needs Trusts and Third Party Special Needs Trusts. The type of trust that is needed depends on whether the source of the funds that will be held in the trust belongs to the individual with a disability or they are being given or bequeathed by another individual.

The rules for the creation and administration of these trusts are complicated. At Sugai & Sudweeks,  we can assist you in determining and creating the type of trust that is needed. We also have experience in administrating Special Needs Trusts.

For additional articles and information, call us or visit the Academy of Special Needs Answers.