Special Needs Trust (including First Party and Third Party)
Estate planning is complicated—even more so if you have a child, grandchild, or other vulnerable loved one who has special needs. Leaving money, assets, or other property directly to a disabled individual could actually render them ineligible for public benefits. Many programs—Medicaid, Social Security disability, etc—have strict asset limits.
There is some good news. A Special Needs Trust (SNT) is a customizable estate planning tool that can be used to leave money/assets for the benefit of a disabled person without adversely affecting their eligibility for benefits. In this article, our San Diego estate planning lawyer provides an overview of special needs planning and special needs trusts in California.
What is a Special Needs Trust?
As explained by the California Department of Health Care Services (DCCS), a Special Needs Trust allows “disabled person to maintain his or her eligibility for public assistance benefits, despite having assets that would otherwise make the person ineligible for those benefits.” There are actually two separate types of SNTs:
- First Party Special Needs Trust: A first party SNT is funded by the beneficiary with their own assets. These types of Special Needs Trust are subject to strict federal and state regulations. For example, they require payback to the government upon the death of the beneficiary to early termination of the trust.
- Third Party Special Needs Trust: A third party SNT is funded by someone other than the beneficiary—potentially a parent or grandparent. As the beneficiary never actually owned and controlled the assets being placed within the trust, third party SNTs are somewhat less restrictive. They do not require payback to the State of California upon the beneficiary’s passing or the early termination of the trust.
The Bottom Line: A Special Needs Trust is a unique estate planning tool that allows people to provide financial support to their most vulnerable loved ones without undermining their eligibility for Medicaid, Supplemental Security Income (SSI), or other forms of government assistance.
How a San Diego Special Needs Planning Lawyer Can Help
Special needs planning is notoriously complex. As an experienced estate planning advocate, our founding attorney Kris Mukherji has the professional expertise you can count on. We are ready to take immediate action to help you find the best solution for your family’s unique needs. Among other things, our San Diego estate planning attorney is prepared to:
- Listen to your family’s story and answer your questions about special needs planning;
- Gather all of the documents, records, and financial information; and
- Help put a Special Needs Trust in place as part of a comprehensive estate plan.
Get Help From an Estate Planning Attorney in San Diego
At The Law Office of Kris Mukherji, our San Diego estate planning lawyer is an experienced, reliable advocate for families. If you have questions about first party Special Needs Trusts and third party special needs trusts, we are here to help. Contact our firm today for a fully confidential initial consultation. From our office in La Jolla, we provide special needs planning services in San Diego and throughout the surrounding region.