Special Needs Trusts

WHAT YOU NEED TO KNOW ABOUT Special Needs Trusts

What is a special needs trust?

A special needs trust is an estate planning tool, designed to allow you to provide assistance to a loved one receiving governmental benefits due to a disability in order to enhance their quality of life.

Are there different types of special needs trusts?

There are several types of special needs trusts, including first party and third party special needs trusts. A first party special needs trust is set up by the individual with the disability due to the receipt of a large sum of money, such as an inheritance or a settlement. A third party special needs trust is set up by a loved one for the benefit of a loved one with a disability. There are two types of third party special needs trusts, including inter vivos special needs trusts and testamentary special needs trusts. A testamentary special needs trust is designed to provide an inheritance to a loved one receiving governmental benefits and an inter vivos special needs trust is designed to provide assistance during your lifetime to a loved one receiving governmental benefits.

Why would a loved one need a special needs trust in order to protect their ability to receive governmental benefits?

Many governmental assistance programs, including social security and Medi-Cal, have a cap on the amount of money an individual owns in order to still receive their benefits.