California Special Needs Trusts
The laws of California allow nearly everyone over the age of 18 to create and administer trusts. Some trusts are simple, while others require drafting by multiple lawyers with endless complexities. Special needs trusts are somewhere in the middle.
A special needs trust is a legal instrument that a grantor can use to supplement the support a disabled person is getting from the government either because they have mental or physical disabilities.
Reliable Lawyers for Special Needs Grantors and Trustees in California
The legal team at Klosek Law works hard helping Californians establish trusts, and plan their estates. Our experienced estate attorneys have a wealth of knowledge in drafting all kinds of trusts and wills, including special needs trusts. We can help provide your disabled family members with more security when the time comes that you are no longer able to care for them, either because you are incapcitated or deceased.
Our lawyers have been navigating the evolving landscape of California state laws for years, studying the most effective strategies to keep wealth within your family or chosen recipients. They will be more than happy to help you in establishing a special needs trust for any beneficiary with mental or physical disabilities. And we are well versed with the new law Obama passed, making it easier for disabled individuals to establish their own special needs trusts, known as first-party special needs trusts.
Do I Need an Attorney to Establish a Special Needs Trust?
Trusts establish a legally binding agreement between three parties: settlor, trustee, and beneficiary. At Klosek Law, we establish many special needs trusts for high-net worth individuals and everyday working people. If you want a relative with physical and mental disabilities to have a support system to lean on apart from the government when you pass away, a special needs trust is a tried and tested instrument. Estate planners help thousands of Californians benefit from these trusts, and it is a great way to look after those who depend on you when you are no longer around.
Typical government benefits that you do not want a loved one to lose include SSI and Medi-Cal, and a properly drafted special needs trust can preserve these government benefits and provide supplemental income through the special needs trust.
Anyone can draft a special needs trust, but it takes legal knowledge, administrative skill, and estate planning experience to create a reliable and well thought out one. You need a special needs trust to help a loved one live a good life without cutting off their access to government benefits.
Different Special Needs Trusts in California
Special needs trusts (SNTs) come in three different forms and can help a loved one obtain income from the government’s Supplemental Security Income (SSI) program (from which people can only benefit if they have $2000 or less in their bank account).
- First-party special needs trusts help people with mental or physical disabilities with a sudden influx of assets, like an accident settlement or inheritance. If you are on SSI or medi-cal, and want to set up a special needs trust with your new settlement or inheritance, please contact our law firm. Until a recent change in the law, the individual that needed a special needs trust could not set it up on his or her own, and needed court involvement. However, a recent change in the law implemented during the Obama administration allows a disabled person to create their own trust, and choose their own trustee (often a family member or professional fiduciary). The law requires all grantors of first-party SNTs to install a provision for Medicaid payback. The main difference between a first party and third party special needs trust is that medi-cal will be reimbursed upon the death of the beneficiary. One important age requirement for a first party special needs trust is that you have to be under 65 years of age at the time you are establishing the trust.
- Third-party special needs trusts are established by someone other than the beneficiary (this could be a friend or family member, some third-party). It is the most common type of special needs trust. It might be a parent or other members of a beneficiary’s extended family who create it to give their loved ones a better standard of living alongside government benefits. A third party special needs trust can be established either when the grantor is living or at the time of the grantor’s death by including special needs trust language in the grantor’s revocable trust. So, if you have a child with disabilities and special needs, or plan to leave an inheritance to someone that is receiving government benefits such as SSI or Medi-cal, let your estate planning attorney know so that they can include appropriate special needs trust language for that beneficiary.
- Pooled trusts are formed when people with special needs band together and combine their assets. These trusts need bylaws that California courts will recognize. Creating a pooled trust is an effective strategy to prepare for retirement, save for therapy and treatment, or obtain a better standard of living. There are a number of established pooled trusts in California.
Whether you plan to create a first party special needs trust, a third party special needs trust, or are considering taking on a role as trustee or beneficiary for someone else’s special needs trust, Klosek Law Offices offer estate planning strategies and reliable legal support. Our probate and estate lawyers have years of experience protecting wealth and providing support for loved ones. We can advise you, or your trustees.
The trained, licensed, and astute lawyers at Klosek Law Offices will help you take care of your assets and estate planning needs. Contact us today at +916-290-7560 or email us at JK@KlosekLawOffices.com regarding special needs trusts. You may also visit us in person at one of our offices either in the bay area or further up north in the Sacramento area.