Special needs trusts for Orange County families
Leave money to a child or grandchild with a disability in a way that is designed to protect their SSI and Medi-Cal eligibility.
Planning ahead
The short answer
A special needs trust holds money for a person with a disability so it can pay for things public benefits do not cover, without counting as the person's own money for needs-based programs such as SSI and Medi-Cal. A trustee controls the money and pays for approved expenses directly. Bezaire & Leathers prepares first-party and third-party special needs trusts and fits them into your overall estate plan.
Why not leave the money directly?
Needs-based programs like SSI and Medi-Cal look at what the person owns. An inheritance or a cash gift left directly to them can count against them and may reduce or end their benefits. A special needs trust keeps the money under a trustee's control, so it can still help, for years, without being counted as the beneficiary's own money.
First-party or third-party: what is the difference?
| First-party special needs trust | Third-party special needs trust | |
|---|---|---|
| Whose money is in it? | The beneficiary's own money | Money from parents, grandparents or others |
| Typical source | An injury settlement, an inheritance received without planning, or savings | Gifts, a will or living trust, or life insurance |
| Medi-Cal payback? | Must include a Medi-Cal payback provision | No Medi-Cal payback requirement |
| How it fits your plan | Set up when the beneficiary already owns the money | Built into your estate plan, for example to receive money at your death |
What can a special needs trust pay for?
The trustee pays providers directly for things that improve the beneficiary's life, such as:
How the money is spent matters. Handing cash to the beneficiary, or paying for certain living costs, can reduce benefits. We explain the rules to the trustee before the first payment.
Who should serve as trustee?
Choose someone organized, impartial and willing to learn the benefit rules. Options include a trusted family member, a professional fiduciary, a corporate trust company, or co-trustees who pair a family member's personal knowledge with a professional's experience with the rules. We help you weigh the choice for your family.
Evelyn's background in this work
Evelyn M. Leathers has cared about this area of law since law school. As Managing Editor of the Whittier Journal of Child and Family Advocacy, she advocated for disabled children's access to an appropriate education. She is a member of the American Bar Association and the Orange County Bar Association, including the trusts and estates section of each. And because our firm also handles trust administration, the trustee you name can come to us for help when the time comes.
How does this fit with a conservatorship?
A special needs trust manages money. It does not give anyone authority over personal or medical decisions for an adult. Some families need both a trust and a conservatorship, and others can use less restrictive tools. We help you sort out which applies.
FAQ
Can the beneficiary receive cash from the trust?
Direct cash payments can affect benefits, so the trustee pays providers directly for approved expenses instead.
Can grandparents set up a special needs trust?
Yes. Grandparents, parents, siblings and others can fund a third-party special needs trust during life or through their will or living trust.
When should we set one up?
Before anyone leaves the person money. If the trust is part of your estate plan now, your will, your trust and your beneficiary forms can name it, and nothing has to be rushed after a death.
Can anyone promise that benefits will continue?
No document can promise that. A trust drafted for California and federal rules, and a trustee who follows those rules, is designed to keep the trust's money from counting against needs-based benefits. We explain what the trustee should and should not pay for.
Planning ahead
- A set of documents that says who receives your property, who manages it if you cannot, and who makes health care decisions for you.Estate Planning
- A will names who inherits and who cares for minor children.Wills & Trusts
Plan for your loved one's future, one step at a time
Call (714) 543-6829 or request a free consultation. We will explain the options in plain language before you decide anything.