A special needs trust is a trust that protects the assets of disabled individuals who are physically or mentally challenged. The disabled individual is named as the beneficiary of the trust and a trustee is appointed to ensure that the beneficiary enjoys the use of property and assets that is held in the trust for his or her benefit. The most common use of special needs trust funds include paying for personal care attendants, out-of-pocket medical and dental expenses, and education, among other things.
A special needs trust is particularly helpful when the disabled individual is receiving need-based government benefits. In California, a special needs trust allows for a disabled person to remain eligible for public assistance benefits even if the person has assets that would otherwise disqualify him or her from those benefits.
Special needs trusts are also helpful when the disabled individual is receiving a large inheritance, insurance proceeds, or a settlement stemming from litigation. Various methods of trust management are available to ensure that the beneficiary is enjoying his or her assets during his or her lifetime.
Do you or your loved one need a special needs trust? An analysis of the disabled individual’s circumstances and needs is required to determine how best to set up the special needs trust.
Rittu Kumar, Esq. is an estate planning attorney and Principal at Kumar Law. Ms. Kumar also practices in the areas of employment law, business litigation, and contract disputes and negotiations. The foregoing is meant for informational purposes only and does not constitute legal advice or an attorney-client relationship. Ms. Kumar can be reached at (323) 456-8657 or via email.