A number of our clients have “special needs” children who are presently receiving public benefits such as Supplemental Security Income and Medi-Cal. Other clients have “special needs” children who may need public benefits later in life. These public benefit programs have asset limits. Many times the children who are receiving public benefits become settled in their lifestyles regarding their living arrangements and working requirements. They usually do not want to lose these benefits and have their lifestyles disrupted by receiving an inheritance when their parents or grand parents pass away.
The parents and grandparents want to preserve the family wealth for all of their children and grandchildren, and do not want to disinherit a child. There is a remedy for this problem, and that is the creation of a supplemental special needs trust. This trust is written into the revocable living trust of the parents or grandparents as part of their estate plan. The share of the inheritance for the special needs child will go into the supplemental special needs trust upon the passing of the parents or grand parents for the benefit of the special needs child.
The overall goal of the supplemental special needs trust is to provide for the needs of the special needs child that are not being met by government benefits. The life of the special needs child can be enhanced by providing for better care, supplemental medical needs, supplemental therapies, recreational opportunities and other living enhancements. The wealth of the family can thereby be preserved, and when the special needs child passes away, his or her share of the inheritance can go to his children or to other family members.
The language in the supplemental special needs trust must be very specific in order for the child to keep the public benefits and yet benefit from the trust. First, the child must not be the trustee, and may not have legal access to the funds in the trust. Another person must be named as trustee. The terms of the trust direct that any distributions from the trust must be in compliance with the Supplemental Security Income, Medi-Cal or other government benefits regulations, so that benefits are not disrupted. The trust must also be drafted in such a way as to avoid any recoupment by Medi-Cal after the special needs child passes away. Your Walnut Creek Elder Law Attorney can advise you and help you in the preparation of a supplemental special needs trust.
This information is not to be taken as legal advice, and you are encouraged to see your elder law attorney. At the Law Offices of Michael J. Young, at 1931 San Miguel Dr., Ste. 220, Walnut Creek, CA www.WalnutCreekElderLaw, 925-256-0298, lawyoung1@gmail.com we practice Elder Law and we help Baby Boomers, Seniors and families through their Elder Care Journey. We help families with long-term care planning, asset-protection plans, comprehensive estate planning, wills, trusts and powers of attorney. We also help Baby Boomers and families get their “Ducks in a Row” in order help them qualify for Medi-Cal and the VA Aid & Attendance Improved Pension benefit.