Parents often engage in estate planning to ensure that their children are taken care of. Unfortunately, parents who have only the best intentions for their children frequently make the mistake of leaving their special needs children or loved ones with disabilities with unprotected inheritances. Persons with disabilities typically receive government assistance through needs-based programs, including Supplemental Security Income (“SSI”) and Medi-Cal. In order to qualify for these programs, individuals cannot have assets in their own names that exceed $2,000. Consequently, leaving assets directly to a special needs child or person with disabilities through an inheritance will often disqualify that person for future government benefits.
In order to avoid the loss of these coveted government benefits, parents can establish a Third Party Special Needs Trust in their living trust or
will. Such a trust is not under the control of the person with disabilities; thus, the special needs person would not be able to revoke it and use the assets for his own purposes. Instead, an independent trustee controls the trust during the special needs person's lifetime. The Third Party Special Needs Trust can own several assets that are used by the special needs person, but the assets are not counted as that person's assets because the trust owns them. Although the trustee cannot give money directly to the person with disabilities, the trustee can spend trust assets to buy a variety of goods and services for that person. Special needs trust funds are commonly used to pay for personal care attendants, vacations, home furnishings, out-of-pocket medical and dental expenses, education, recreation, vehicles, and physical rehabilitation.
If you want to leave money or property to a special needs child or a person with a disability, you must plan carefully. Contact one of our estate planning attorneys for a
free consultation to ensure your special needs child or loved one is properly protected in your