Special Needs Planning in California – All You Need To Know

If you are considering developing an estate plan, it is important that you have all the facts available to you. This is especially true if you intend to include any loved ones who have a disability or are otherwise considered to be special needs. People with disabilities already have a unique struggle ahead of them, and if they are a part of your life, you want to make sure they’re taken care of when you’re gone. Understanding special needs planning in California is important.

Developing an estate plan is not an easy process, especially if you have a significant estate and a lot of potential beneficiaries who may seek to inherit something from you. However, having an estate plan in place is vital if you want to make sure your wishes are followed when the time comes. The legal team at Meinzer Law Firm, PC, can help walk you through everything you need to know about special needs planning and how you might benefit from establishing a trust.

What Do You Need to Know About Special Needs Planning?

In California, special needs planning is the legal act of ensuring your loved ones with disabilities are given everything they need in terms of financial security, as well as additional protections. One of the most important aspects of special needs planning is the added security that prevents your assets in trust from interfering with your disabled loved one’s governmental assistance that they may be receiving every month, such as Medicaid or Supplemental Security Income (SSI).

When you start looking into special needs planning, it is reasonable to assume that your primary goal is to provide your disabled loved one with well-protected financial security as well as continuous access to their monthly health benefits that they receive separately from your contributions. Together, your assets and their benefits can work in tandem to improve your loved one’s quality of life. The most effective way to do this is with a special needs trust.

A special needs trust (SNT) is a specific legal arrangement that allows a designated trustee to hold your disabled loved one’s inherited assets in trust while still letting them be eligible to receive certain governmental assistance benefits. This program allows your loved one to benefit from your estate plan as needed while still maintaining their health benefits every month. This way, their quality of life is not hindered by either losing their monthly benefits or their assets.

There are two main types of special needs trusts that can be established in California. Both types have their positive and negative aspects, and it will ultimately be up to you to determine which one works better for your situation and your loved one’s ongoing needs. These two main types are:

• First-Party Special Needs Trust. A first-party SNT, which is also known as both a self-settled SNT and a (d)(4)(A) SNT, is entirely funded by the disabled individual’s own contributions and the beneficiary’s own assets. The beneficiary of this trust is the disabled individual, and they have control over it. For a first-party SNT to be valid, it must be established before the individual is 65, and it must reimburse Medicaid payouts.
• Third-Party Special Needs Trust. A third-party SNT is a bit different. This form of special needs trust is not established by the beneficiary. Instead, it is set up by someone else, usually a parent or guardian, and is built using their assets. Usually, this form of SNT is guarded by a designated trustee who provides the disabled individual with the money they need from the trust as needed. These trusts do not require Medicaid reimbursement.

FAQs

Q: How Much Does It Cost to Set Up a Special Needs Trust in California?

A: The amount it may cost you to set up a special needs trust in California depends entirely on the type of trust you are looking to set up, as well as additional fees that may be unique to your situation. The legal fees for a special needs trust lawyer generally cost anywhere between $2,000 and $5,000.

There may be additional fees depending on who is designated the trustee, and you may have to endure court costs if the trust requires court approval to verify.

Q: What Programs Are Available for the Disabled in California?

A: There are many different programs available for the disabled in California. It is estimated that over 4 million people in California have a disability. People with disabilities are afforded the opportunity to apply for many different forms of state and federal governmental assistance that help them if they are unable to work or require additional daily assistance.

There are programs like Supplemental Security Income, Social Security Disability Insurance, and California State Disability Insurance. Everyone’s needs are different.

Q: Do You Need a Lawyer for Special Needs Planning?

A: While you do not need to hire a lawyer for special needs planning, it is highly recommended that you do it anyway. Developing a special needs plan inside of your estate plan can be a complex and difficult process, particularly if you do not have experience with establishing one. An experienced lawyer can help you through every step and ensure you aren’t taken advantage of at any point. Having someone by your side throughout the process can make all the difference.

Q: How Does Special Needs Planning Work?

A: Special needs planning works by making sure your disabled loved one is given the additional protection and financial stability that you want them to have in your estate plan. Most importantly, establishing a special needs trust ensures that your additional help does not clash with the individual’s governmental assistance. They can still receive their disability benefits while benefiting from your trust.

Reach Out to a Special Needs Planning Lawyer

When you have a substantial estate and a loved one with a disability, it’s perfectly reasonable to want to take extra precautions to make sure they are taken care of and left with significant financial help if you pass away. You may even want to establish these protections before that, just to make sure they have everything they need. A good lawyer can help you set that up.

At Meinzer Law Firm, PC, we can help you put together a comprehensive special needs plan that accomplishes everything you need. Contact us to schedule a consultation with a valued team member today