Palo Alto Special Needs Trust Lawyer

The Importance of the Special Needs Trust

When someone is unable to work as a result of a physical or mental condition, they may struggle to financially provide for themselves. While parents and other family members will often financially support individuals in these scenarios, they may understandably worry about what will happen to their loved one when they are no longer around to care for them. 

While public benefits are available to individuals with special needs, they often do not provide an adequate level of financial assistance. Furthermore, eligibility is dependent on meeting highly restrictive income and asset limits. This can paradoxically limit a family’s ability to give their loved one the monetary aid they need.

3 Reasons To Set Up A Special Needs Trust Sooner

When preparing for the future of a child or family member with a disability, many parents and guardians plan to set up a special needs trust.

This unique kind of trust can provide for many of the supplemental needs of a disabled person without jeopardizing that person’s eligibility for vital government benefits, including Medi-Cal and Supplemental Security Income. However, few know that there are concrete benefits to setting up such a trust sooner rather than later.

1. Start growing now. When parents or grandparents set up and put money into a special needs trust during their own lifetimes, it can start to grow immediately. From the time the trust is established, anyone can contribute to it – uncles, godparents, friends – creating an especially beneficial way for loved ones to contribute to your child or family member’s future.
2. Ensure that the trust has the most beneficial structure. Some special needs trusts, especially those created for assets already belonging to the beneficiary, mandate that funds remaining in the trust after the death of the beneficiary must first go to pay back Medi-Cal for all expenses covered during the beneficiary’s lifetime. When a trust is set up within the parents’ lifetime, by contrast, it can be established before any assets pass on to the beneficiary. A correctly drafted third-party special needs trust need not have a payback provision.
3. Give yourself time to change the trustee(s) or remainder beneficiaries. The administration of a special needs trust can be complicated. Many parents or guardians entrust this responsibility to a professional trustee, who can ensure proper disbursement that does not endanger benefits eligibility. Other parents select a family member. Regardless, a properly constructed third-party special needs trust can give parents the flexibility to change trustees over time as needs change.

Can You Change The Terms of a Special Needs Trust Once It's Been Established?

The flexibility to change the terms of a Special Needs Trust once it's been established largely depends on the type of trust it is.

• Revocable Trust: If the Special Needs Trust is revocable, meaning it was designed to be changed or canceled at any point, then the grantor (the person who created the trust) retains the ability to modify the terms of the trust after it has been established.
• Irrevocable Trust: If the Special Needs Trust is irrevocable, meaning it cannot be readily altered, amended, changed, or revoked after its creation, then the terms generally cannot be changed once the trust has been established. This is often the case for many Special Needs Trusts, as they are typically designed to be irrevocable to prevent the assets from being considered as part of the beneficiary's personal assets for purposes of determining eligibility for public benefits.

However, there can be exceptions to this rule if all parties (grantor, trustee, and beneficiaries) agree, or under certain circumstances, a court may allow changes. It's crucial to consult with a knowledgeable attorney in this area to understand the specific rules and regulations that apply to your situation.

Does A Special Needs Trust Impact Government Benefit Eligibility?

A special needs trust is an ideal legal tool that facilitates a lifelong financial safety net without disturbing eligibility for vital government benefits. Assets held in a special needs trust are not counted when determining eligibility for Supplemental Security Income (SSI) or Medi-Cal. Assets in these trusts are used to supplement government assistance and pay for goods and services that the public benefits system is unable to provide. 

For individuals with special needs, no other type of trust is more important. Our Palo Alto special needs trust attorneys can help you make the most of this invaluable estate planning instrument.

Ready to get started? Call (650) 683-9200 today to learn more from a Palo Alto special needs trust attorney.

California Special Needs Trust Planning for Secure Futures 

Transfers of monetary and physical assets must be carefully handled to ensure a loved one with special needs does not inadvertently violate eligibility rules for applicable public benefits. Even temporarily exceeding asset or income limits can result in extended periods of ineligibility, potentially endangering your family member’s financial security.

For this reason, you should always consult an experienced legal professional before moving or transferring ownership of assets. Our team is familiar with many scenarios where financial resources can unwittingly disturb Medi-Cal or SSI eligibility. For example, we often work with personal injury attorneys to ensure that settlements and awards are not granted directly to an individual with special needs. Instead, we direct these assets to be placed in the special needs trust so that they remain available to the individual throughout their lifetime. 

Empowering California Families with Special Needs Trust Knowledge

Our Palo Alto special needs trust lawyers are nationally recognized innovators in this area of the law and are proud to offer a variety of educational resources to families throughout California. Our Annual Special Needs Trust Community Seminar explains how these trusts work, the value they offer, and practical advice for how they should be operated. We are pleased to partner with nearly a dozen nonprofit organizations that serve as cosponsors of this well-attended event. 

Gilfix & La Poll Associates LLP has also published a comprehensive guide, Special Needs Trust Creation and Management Guide with ABLE Act Updates, on this subject. This book is designed for use by parents and those who serve as trustees or managers of special needs trusts. Our goal is to identify the most important issues that typically arise and to explore how to effectively address them. Above all, the guide aims to be practical and is a “must-read” if you have a family member with a disability. We invite you to order your copy on Amazon today.

Contact a Trusted Palo Alto Special Needs Trust Attorney Today 

For more than 30 years, Gilfix & La Poll Associates LLP has innovated creative legal solutions to help you manage and plan the future of your estate. To contact an estate planning lawyer or call (650) 683-9200

Call (650) 683-9200 or contact us online to learn more about the benefits of special needs trusts and planning in California.