New Special Needs Trusts Allow Persons under 65 to Keep Public Benefits!!!

Good news! If you are UNDER 65 years old and expecting an inheritance or court ordered settlement, you can have access to these funds and allows you to keep your public benefits (Medi-CAL or SSI).

There is a new federal statute that amended the rules regarding special needs trusts and now allows mentally competent individuals to establish their own “payback” special needs trusts with their own assets. This is called a California Self-Settled Special Needs Trust, as known as a First Party Special Needs Trust that can now be set up to protect your public benefits.  So this is a legal way for you to receive an inheritance or settlement (from a personal injury court case) and stay on Medi-CAL and have extra money be held in trust to enhance the quality of your life.

You must get this set up BEFORE your settlement or inheritance comes to you!

Attorney Joseph McHugh is our Special Needs Attorneys and he works quickly with your Personal Injury Attorney or Estate Attorney to ensure the Special Needs Trust is properly set up before the court ordered settlement(s) or inheritance monies are distributed to you.  With proper Pre-settlement planning, your expected money will help be expedited into the Special Needs Trust… which then can be used for your benefit as soon as available when the final settlement is placed in the Special Needs Trust account.

You will need a person to be your trustee and manage the special needs trust assets and determine what the trust can pay for…. this person must act on your behalf! (If you do not have someone you trust, you can hire a Professional Fiduciary to be the trustee for your Special Needs Trust.) This does not give you total access to the money coming to you, but it does allow for many things to be paid for and most importantly it allows you to keep your public benefits and have additional items paid for by the special needs trust California Self-Settled Special Needs Trust, known as First Party Special Needs Trusts can now be set up to protect Your Public Benefits.

There are rules about what this Special Needs Trust can pay for, but basically it can pay for things like the following:

  • Car and related expenses
  • Clothing
  • Furniture & Household Items
  • Electronics (including TV, Computers, cable and internet)
  • Home Utilities
  • Education and related expenses
  • Insurances
  • Supplemental home care and private care services
  • Travel expenses
  • Entertainment (movies, theater tickets)
  • Legal fees
  • Housing (*may reduce SSI benefits)
  • Food (*may reduce in SSI benefits)
  • Medical procedures or Physical Therapy not covered government assistance
  • Medications (not covered by government benefits

The rules for setting up any type of California Special Needs Trusts can be complicated and it is important to make sure that a person in need of a Special Needs Trust gets good legal advice from an elder law attorney about how to set it up and also properly manage the payments in order to avoid serious problems or loss of public benefits. We at LA Law Center have experience at setting up many different types of Special Needs Trusts and understand that they in many cases need to be created quickly as generally time is of the essences! We are happy to help you.  Call for a free 30 minute consultation to see if we can help you…Call us at: (818) 241-4238

Is Special Needs Planning Something You Need To Understand? Part Two

Many times parents tell the siblings on a special needs child that from their own inheritances, they must provide money to their sibling with child with special needs. This is not a solution that will protect a child with special needs after the death of the parents!  There must be formal planning and assets set aside for the special needs child.  Remember…your other children may have their own family expenses and financial issues.  This does not ensure that special needs child will get the help they need.

It is important for the  parents of a disabled child  to provide clear instructions and a legal documentation that will lessen the burden on the family and create a plan that makes sure the family will understand how to help care for the loved one with disabilities.

It is important for advanced special needs planning!  None of us know when we may die or become incapacitated.  It is important to plan early, just in case something should happen to you earlier than you expected! If there is not a special needs trust set up before parents die, the child with special needs may never be able to compensate for a failure to plan. Special needs beneficiaries cannot directly receive an inheritance without possibly losing their state and or federal benefits which may be critical for their quality of life and medical needs.

 A properly designed special needs trust promotes the comfort and happiness of the special needs beneficiary without sacrificing eligibility of government benefits. These government benefits can include medical and dental expenses, necessary or desirable equipment training and education, housing, transportation and an allowance for food.

If this special needs trust is properly funded, the disabled person also can receive funds to be used for quality-of-life-enhancing expenses. The state and federal laws or rules can change so once a trust is set up, it is important for the assigned trustee to continually seek the  advice of an elder law attorney when administering a special needs trust.

LA LAW Center, PC is happy to discuss your family situation in a free consultation. Please call (818)241-4238.