If you plan on leaving any type of assets to a loved one who is receiving government benefits due to a disability, you must do so carefully. If you don’t, you could jeopardize your loved one’s ability to receive Supplemental Security Income (SSI) and Medi-Cal benefits. By setting up a special needs trust, you can avoid a lot of problems.
Owning a home, a car, furnishings and normal personal effects doesn’t affect eligibility for SSI and Medi-Cal qualifications based upon the current law. However, other assets including cash, bonds, stocks and bank accounts may disqualify your loved one from receiving benefits.
Instead of leaving the assets directly to your loved one, you can leave it to a special needs trust. You can then choose someone who will serve as the trustee and your loved one will be considered the beneficiary. This trustee will be in charge of making sure that this money is spent on the beneficiary’s behalf, however, they cannot give money directly to them. These assets and funds are commonly used to pay for personal care attendants, vacations, medical expenses, education, recreational activities, and other expenses. Because the beneficiary will have no control over the assets within the special needs trust, SSI and Medi-Cal will ignore the trust assets for program eligibility purposes. Because a special needs trust is highly labor intensive and complicated to manage, a professional trustee, such as a trust company, may be best suited over a family member or close friend.
The special needs trust can last as long as it is needed. Typically the trust will go on until the beneficiary’s death or until there are no longer any funds available.
Every person with special needs is different which means that every special needs trust is going to be different too. The best way to determine the best way to set up the special needs trust is to speak with an experienced attorney. Let us help you take care of your loved ones. You can schedule a complimentary consultation today!
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