San Jose Special Needs Trust Lawyer
Comprehensive Legal Solutions for Special Needs Families in San Jose
If you have a family member with special needs, you are most likely concerned about their financial future after you pass away. Many individuals with disabilities obtain assistance through government programs that have strict eligibility guidelines regarding any financial assistance they may receive from outside sources. Even so, there are provisions for special needs trusts that enable beneficiaries to access financial resources for their needs.
Suppose you are considering creating a special needs trust for a loved one. In that case, you must seek help from a qualified attorney to ensure that your family member does not jeopardize their ability to receive benefits. The Tree of Life Law Firm in San Jose, CA, is dedicated to helping parents plan for the future, knowing their child will be adequately cared for. Contact our law offices today to schedule a complimentary consultation to learn more about our legal services.
What is the Purpose of a Special Needs Trust?
The purpose of a special needs trust (SNT) is to provide individuals with physical or developmental disabilities with access to additional financial support while preserving their eligibility for government assistance. Individuals with special needs must adhere to strict financial guidelines to continue qualifying for Medi-Cal and Supplemental Security Income (SSI).
A special needs trust enables a person with disabilities to access funds that are not covered by their government benefits. Even so, anyone who is considering creating an SNT should always consult with an experienced attorney. There are strict state and federal guidelines that dictate how funds may be used, and failing to set up the trust properly could critically undermine the beneficiary’s ability to maintain the benefits provided to them.
If you have a loved one with special needs, an SNT is a critical component of a comprehensive estate plan. Tree of Life Law Firm has significant experience in helping parents and other family members ensure compliance with all applicable laws.
What Type of Expenses Can Be Paid With a Special Needs Trust?
Although individuals who receive Supplemental Security Income (SSI) have specific rules regarding the expenses for which they can use their money, there are several options available through special needs trusts.
Some of the most common expenses that SNT trust beneficiaries can use to assist with their expenditures and other supplemental needs, where it will not jeopardize Medi-Cal or SSI, include:
- Medical care not covered by public benefits, including dental services or other therapies
- Transportation costs
- Personal care costs
- Education and training costs
- Vacations
- Electronics
- Hobbies
- Household items
- Professional services, such as legal fees related to the trust
Funds from a special needs trust can also be used to make a one-time purchase for a vehicle, provided the trust documents explicitly permit it. Expenses that should be avoided include mortgage payments, rent, food, and utilities, as the beneficiaries’ public benefits are intended to cover these costs.
What is the Difference Between a First-Party SNT and a Third-Party SNT?
Depending on the disabled person’s circumstances, there are several options for a special needs trust. Although there are many noticeable differences between a first-party and third-party SNT, the primary distinction lies in what happens to the money upon the trust beneficiary’s death.
First-party SNT
A first-party special needs trust is funded with the trust beneficiary’s own money and is subject to a payback provision. Under this provision, when the beneficiary dies, the trustee will allocate any funds remaining back to the state of California’s Medicaid agency, Medi-Cal.
Funds for a first-party SNT may come from the beneficiary, such as when they receive an inheritance or settlement. A first-party SNT may be funded by parents, grandparents, a legal guardian, the court, other family members, or the beneficiary. Even so, a first-party SNT can only be established for a beneficiary under the age of 65 at the time it is created.
Third-party SNT
A third-party SNT is funded from assets other than those of the beneficiary. Third-party SNTs can also be standalone trusts that are funded in the trustor’s lifetime or through a testamentary trust established in their will. Unlike a first-party SNT, a third-party special needs trust is not subject to the Medicaid payback requirement. That being the case, any remaining assets can be distributed to other family members or beneficiaries without concern that the state will initiate Medicaid estate recovery proceedings.
Who Can Serve as the Trustee of a Special Needs Trust?
California law allows family members, friends, a professional trustee, a bank, or a non-profit organization that focuses on SNTs. Many parents choose to serve as the trustee so they can closely monitor funds and be assured their loved one will have efficient access to resources.
The beneficiary, however, is not allowed to serve as a trustee of a special needs trust.
Some of the factors that should be taken into consideration when choosing a trustee include their financial management skills and knowledge of the nuances involved with receiving public benefits. Any intended trustee should also be evaluated on their administrative responsibilities, trustworthiness, and whether their appointment could pose a potential conflict of interest.
When choosing a trustee for a special needs trust, it is also crucial to designate a successor trustee who can easily assume all responsibilities if the original trustee is no longer able to serve.
Due to the legal complexities associated with managing a special needs trust and selecting a suitable trustee, it is advisable to work with a knowledgeable special needs trust attorney who can help you make informed and confident decisions.
Schedule a Consultation with our San Jose Special Needs Trust Attorney Today
Tree of Life Law Firm recognizes that many San Jose residents have special needs that require careful planning and attention. Our goal is to help families so they can focus on the things that matter most without worrying that their loved one will not have access to critical resources.
Our law firm is dedicated to helping clients with special needs through estate planning, so they can rest easy knowing their loved ones will be well cared for today and in the future.
If you have concerns or are ready to establish a special needs trust, please contact our San Jose, CA law firm today at 408-539-9858 to schedule a complimentary initial consultation.