Special Needs Planning

Having children or other beneficiaries who are disabled often leads to worries about managing the high cost of their care. Many families are unaware that large cash gifts or inheritances may actually interfere with their loved one's ability to receive needs-based public assistance, like SSI and Medi-Cal . At TheLaw Office of Lisa C. Bryant in San Jose, California, we help clients take part in effective special needs planning to ensure that all the needs of the beneficiaries are met.

When a loved one with a disability stands to inherit or obtain money that may affect their benefits, it is often advisable to create a special needs trust. A special needs trust (often called a supplemental needs trust) is a plan that allows a client to set aside property for his or her loved one's benefit without interfering with his or her ability to receive or apply for needs-based public assistance. This trust, authorized by federal and state law, allows the parents, grandparents, or even the individual with the disability to set up a trust for the benefit of the disabled person and fund it with cash and other assets.

An individual, called a trustee, is named to manage the trust and the trust assets are used to supplement the needs of the disabled beneficiary. A special needs trust will be used to pay for a wide range of care expenses, including:

  • Special therapy
  • Upgrades in care
  • Entertainment expenses for the disabled person

If a special needs plan is effective, the government will not count the property owned by the special needs trust when determining the disabled person's eligibility for government assistance.

In certain circumstances, a special needs trust can be set up and funded with the assets of the disabled beneficiary. This is known as a first-person special needs trust and is typically used in cases where the disabled person receives an unexpected inheritance or receives a settlement in a personal injury lawsuit.