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Things to know about a special needs trust in California

On Behalf of | Apr 26, 2023 | Estate planning

A special needs trust in California, also referred to as a supplemental needs trust, is a legal arrangement designed to benefit individuals with disabilities. This is an irrevocable trust that has very specific requirements. Because the beneficiary doesn’t have direct access to the trust’s contents, it won’t count as an asset for them.

The purpose of a special needs trust is to manage and preserve the assets of the beneficiary while maintaining their eligibility for government assistance programs, such as Supplemental Security Income and Medi-Cal. 

Establishing a special needs trust

You must appoint a reliable person or organization to manage the trust on behalf of the beneficiary. The trustee’s role includes making decisions about investments and distributions from the trust. This individual pays for things directly for the benefit of the beneficiary.

The trust won’t do any good for the beneficiary until you transfer assets like cash, real estate or personal property into the trust. The beneficiary will not have direct access to these assets. Instead, the trustee will use them to provide for the beneficiary’s needs.

Special needs trusts must have specific wording that dictates how they can be used. This is part of what establishes a supplemental source of support instead of a primary source of support for the beneficiary. Without proper wording and the correct setup, the beneficiary may lose eligibility for the services they count on for care. 

Anyone who has a person under their care who has special needs should ensure they do what they can to provide care for that individual. A special needs trust enables you to do this even after you pass away – and that’s a real gift for your loved one.