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Do I Need A Lawyer To Create My California Special Needs Trust Plan?

12/22/2022 | Special Needs Trust
Do I Need A Lawyer To Create My California Special Needs Trust Plan

When you have a child or loved one with a severe disability, planning for his or her care is usually a significant priority. After going through the government benefit application and eligibility process, the recipient is usually left with income-sensitive benefits such as Medi-Cal coverage and Social Security Income (SSI). One important way to help supplement your loved one’s benefits without endangering his or her critical government program eligibility is by creating a special needs trust. You may wonder: Do I need a lawyer to create my California Special Needs Trust Plan? The answer is yes and here is why:

California Special Needs Trusts are Complex Legal Documents

A special needs trust is specifically for individuals who have qualifying disabilities and are intended to help supplement government program income and coverage. This is a legal device which must be created according to both California and federal laws. If the trust is not prepared correctly, it could be considered disqualifying income to the recipient. Having a lawyer will help you ensure that your California special needs trust plan is developed according to the applicable laws and protects rather than endangers your loved one’s benefits.

California Special Needs Trust Can be Funded Differently

There are two main types of California special needs trusts: First-Party and Third-Party. A first-party special needs trust is funded with assets which belong to the recipient or to which he or she is legally entitled. A third-party special needs trust is a trust which is funded by persons other than the beneficiary for his or her benefit. A significant difference is that when you create a first-party trust, the State must recover a certain amount from the trust when the recipient dies, or the trust ends in order to be reimbursed for payment of certain government benefits. A third-party trust, on the other hand, allows the trust assets to pass to beneficiaries without the State seeking recovery. When you have a knowledgeable California special needs trust attorney, he or she will know the right steps to take to preserve trust assets.

California Special Needs Trusts Can Impact Medi-Cal and SSI

A California special needs trust must be created with specific language and direct that trust payments be made for particular purposes. If drafted improperly, Medi-Cal and SSI could view trust payments as being income for the trust beneficiary. Because these programs are income-sensitive, if the recipient gets too much “income” from the trust, he or she could be disqualified from receiving vital benefits. An experienced California Special Needs Trust attorney will know the right provisions to include and how to make certain that trust payments are made correctly.

Making sure your loved one has supplemental support is critical to his or her well-being. At the Law Offices of Alice A. Salvo, we have experienced California special needs trust attorneys who are here to help you effectively prepare for your loved one’s future. Contact us today to schedule your free consultation.