Special Needs Trusts

Be secure knowing all of your family's needs are taken care of.


Give your differently-abled loved one the care and enrichment you desire for them, when you're no longer able to provide that.

Why is a Special Needs Trust necessary?


Most people with disabilities receive Social Security Disability (SSDI), Medi-Cal, and possibly also Supplemental Security Income (SSI) or Section 8 housing. These benefits provide food and basic shelter, but nothing extra to make life comfortable.


Even though they’re not large, those government benefits, especially Medi-Cal, are crucial for people with disabilities. But if family or friends give the disabled person money, that’s “income”, and the recipient can lose her benefits.

How does a Special Needs Trust help?


Congress realized that it would be unfair to take away benefits from a disabled person just because Grandma left him some money. So Congress allowed for Special Needs Trusts.


When money is put in an SNT for a disabled person, that money does not keep the disabled person from receiving desperately-needed benefits. The money can provide things most of us take for granted: internet access, phone service, bus fare or gasoline for a car. It can provide special equipment or assistance.

First Party Special Needs Trust


If the parents or grandparents leave an inheritance without having creating a special needs trust, or if the disabled person receives money in settlement of a lawsuit (often the one that caused the disability), the inheritance or the lawsuit settlement already belongs to the disabled person.


So a first-party special needs trust must be created. A parent or grandparent can be the legal creator of the trust. The beneficiary can be the creator of the trust if they're legally competent. After the beneficiary dies, Medi-Cal must be repaid before the rest of the money can be distributed to anyone else.

Third Party Special Needs Trust


The easiest kind of Special Needs Trust to create and to administer is a third-party Special Needs Trust. While they are alive, a grandparent, a parent, or anyone else can arrange for the creation of a special needs trust for their loved one and put money into it.

Two kinds of​ Special Needs Trusts:

I'm not rich. How do I fund a Special Needs Trust?


You can make a Special Needs Trust a beneficiary of your estate. You can also purchase a life insurance policy and make the Special Needs Trust the beneficiary. 


You probably have relatives, and even friends, who would like to help provide for your child. At Sonin Law, when we create a Special Needs Trust, we give you letters you can send to grandparents and other family members, asking them to direct any inheritance they want to give your child into the Special Needs Trust.

What can the Trust pay for?


In most cases, the trust should only pay for things not paid for by public benefits, such as transportation, clothes, internet, phone, dental care, durable items like furniture.


If the trust has a lot of money, the trustee can pay for food and housing, so that the beneficiary has a more pleasant life. If the beneficiary receives SSI, they will lose part of their check. But the trade-off is often worth it.


The government monitors what is paid for out of the trust. If a trustee makes payments incorrectly, the beneficiary can lose their vital pubic benefits. That's why it's often safest to appoint a professional trustee, such as a professional fiduciary, to be sure the rules are followed.

Provide for you child's future now. 


Call Sonin Law today at (530) 662-2226 for an appointment to discuss setting up a Special Needs Trust.

© 2015 Barbara Sonin

DISCLAIMER: In publishing these materials, the author is not engaged in rendering legal, accounting or other professional service. If legal advice is required, the service of a competent professional should be sought. No attorney-client relationship is created by the provision of this information.

Sonin Law: Estate Planning, Trusts, Probate, Special Needs in Woodland, California
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