Special Needs Trusts

A Special Needs Trust is a specific type of trust where money or property are held on behalf of a beneficiary who has some disability or impairment and needs support of public benefits (like Medi-Cal, social security programs, or home care).

Many public benefits programs are means tested, meaning that if an individual has more than a certain amount of income, they will not qualify for the program. A special needs trust allows that money to be set aside to pay for their special needs to enhance their quality of life, without that money being considered income in the eyes of public benefits programs.

Whether it's managing an inheritance, settlement funds, or planning for the future, we ensure that you or your loved one's needs are met without jeopardizing their eligibility for essential benefits.

A Special Needs Trust can be established by the individual with special needs or by a third party on their behalf. Choosing the right approach depends on various factors, including legal obligations and financial considerations, that we will help guide you through.

Examples

An individual has severe cognitive disabilities that prevents them from working or being able to manage their finances. Their medical costs are significant, and they rely on Medi-Cal coverage. Their parents want to leave them a substantial inheritance, so they set up a special needs trust. That way, their child can continue to qualify for Medi-Cal, while the trust funds are used to enhance their quality of life through necessary medical care, adaptive equipment, and other vital expenses.

An individual gets in a work-related accident that leaves them physically disabled. They receive a large settlement from the incident. If the money was to pass directly through their hands, they would no longer qualify for income-restricted public benefits. So, they set up a special needs trust for the settlement money with an appointed trustee so that they may continue to be eligible for government benefits, while using the payouts from the trust for at-home care and assistive technology.

Money to Cover Necessary Expenses and Quality of Life Improvements

A special needs trust is a way of supporting someone with a disability by having a pot of money available to pay for all the unavoidable expenses required just to live their daily life as well as to provide opportunities for them to make purchases that can tremendously enhance their quality of life (assistive technology, adaptive equipment, etc.).

Our team understands the concerns many have surrounding Special Needs Trusts, such as giving up your direct control of the money, selecting a trustee, and navigating complex legal requirements.

We work closely with our clients to address these concerns – explain the advantages and disadvantages of all decisions, ensure that the trust qualifies under the law, and make sure that the client feels comfortable and secure in the plan.

Trustees and Trust Advisors

Like all trusts, a Special Needs Trust requires a trustee to manage it. With a Special Needs Trust, that trustee cannot be the beneficiary. We will discuss options for who you would like to appoint. The trustee is the person managing the money and deciding on distributions or payments from the trust.

We will talk through all your options to come up with a plan you are comfortable with. This may include appointing a Trust Advisor, who can advocate on behalf of the beneficiary and help alleviate the fear of lack of control.

While Special Needs Trusts typically don't require frequent updates, we monitor changes in laws and regulations so that we can update trusts for compliance and efficacy as needed. For instance, if the goal of the trust is for the beneficiary to be able to qualify for Medi-Cal, when Medi-Cal requirements change we may need to adjust the trust to maintain their ability to qualify.

Planning for the Future

At KFS Law Firm, we have the expertise to guide you through the complexities of Special Needs Trusts. Our compassionate, thorough, and personalized approach, combined with our depth of legal knowledge, ensures that you or your loved one's future is secure.