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Special Needs Planning

Special Needs Planning

If you currently provide care for a parent, child or loved one with special needs (such as mental or physical disabilities), you must have contemplated with concern about what may happen to them when you are no longer able to provide and care for them.
 
While you can certainly arrange for your special-needs loved ones to receive money and assets, such a bequest may prevent them from qualifying for essential benefits under the Supplemental Security Income (SSI) and Medi-Cal programs. Public monetary benefits provide only for the bare necessities such as food, housing and clothing. As you can imagine, this level of support does not provide the resources that would allow a richer quality of life. If parents leave assets to a child who is receiving public benefits, they run the risk of disqualifying the child from receiving them. Fortunately, the government has established rules allowing assets to be held in trust, called a “Special Needs” or “Supplemental Needs” Trust for a recipient of SSI and Medi-Cal, as long as certain requirements are met.
 
Our law firm can help you set up a Special Needs Trust (SNT) so that government benefit eligibility is preserved while trust assets are used to meet the supplemental needs of the person with a disability (beyond the basic needs of food, shelter, clothing, and the medical and long-term supports and services of Medi-Cal). In fact, the SNT must be designed specifically to supplement, not replace, public benefits. Parents should be aware that funds from the SNT cannot be distributed directly to the disabled beneficiary. Instead, funds must be disbursed to a third party who provides goods and services for use and enjoyment by the disabled beneficiary.
 
A Special Needs Trust can be used to fund a variety of life-enhancing expenditures, without compromising your loved one's eligibility, including:

  • Annual check-ups at an independent medical facility
  • Attendance of religious services
  • Supplemental education and tutoring 
  • Out-of-pocket medical and dental expenses
  • Transportation (including purchase of a vehicle)
  • Maintenance of vehicles
  • Purchase of materials for a hobby or recreation activity
  • Trips or vacations
  • Entertainment such as movies, shows or ballgames. 
  • Purchase of goods and services that add pleasure and quality to life: computers, videos, furniture, or electronics.
  • Athletic training or competitions
  • Special dietary needs
  • Personal care attendant or escort

      
Special Needs Trusts are a critical component of your estate planning if you have disabled beneficiaries for whom you wish to provide after your passing. Generally, Special Needs Trusts are either stand-alone trusts funded with a separate asset like a life insurance policy, or sub-trusts in your existing living trust.   


 


O'Donnell & Associates assists clients all over the San Francisco Bay Area. Our main office is in Menlo Park, California. Please call for an appointment.



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