Special Needs Trusts in California – Protect Benefits Without Sacrificing Support
If your loved one depends on SSI or Medi-Cal, an inheritance or settlement could unintentionally disqualify them. At Newman Law Group, we help California families create Special Needs Trusts that preserve critical public benefits while allowing for a fuller, more supported life.
Planning That Supports the Future Without Disrupting Benefits
A Special Needs Trust (SNT) is a legal structure that holds assets for someone with a disability without impacting their eligibility for needs-based programs like SSI and Medi-Cal. It provides supplemental resources for quality of life expenses—from dental care to educational programs—without affecting core government benefits.
California has strict rules regarding income and asset thresholds. An improperly structured gift or inheritance could lead to benefit loss. That’s why working with an experienced special needs trust attorney is essential.
Key Concepts for California Special Needs Trusts
Third-Party vs First-Party Trusts
A third-party SNT is funded by someone other than the beneficiary, often as part of a parent’s estate plan. These trusts don’t require repayment to the state. A first-party SNT holds the beneficiary’s own assets—such as an injury settlement—and may be subject to Medi-Cal estate recovery.
How the Trust Supports the Beneficiary
Funds in an SNT can be used for therapies, equipment, classes, travel, companionship care, and more. The trustee uses discretion to avoid direct cash gifts that might count as income.
Selecting the Right Trustee
Managing an SNT is complex. Whether you choose a family member or professional fiduciary, the trustee must understand benefit rules and make distributions in compliance with federal and California law.
Frequently Asked Questions
What is the difference between a first-party and third-party special needs trust?
First-party trusts are funded with the beneficiary’s own assets and must repay Medi-Cal upon their death. Third-party trusts are funded by others and typically do not require repayment.
Can I name a family member as trustee?
Yes, but the trustee must be capable of managing complex rules and documenting distributions carefully. Professional guidance is strongly recommended.
What can a Special Needs Trust pay for?
Almost anything that enhances the beneficiary’s quality of life—transportation, therapies, education, home modifications—as long as payments are made to third parties.
Can a Special Needs Trust be changed later?
Depending on how it's drafted, yes. It's important that the trust is flexible enough to evolve with changing laws and beneficiary needs.
Planning With Purpose
Secure the Right Support for Your Loved One’s Tomorrow
With the right Special Needs Trust in place, you can rest assured that your loved one’s benefits will remain intact—while still providing them with access to the comforts and services they deserve. Let Newman Law Group guide you through every step.
