CREATING A SPECIAL NEEDS TRUST IN LOS ANGELES, CALIFORNIA
As special needs attorneys, we gear our planning based on personal experience. When leaving an inheritance to a special needs child, much attention should be given to the selection of the trustee and the special needs language as well as the expected cost of living of the child. California Special Needs Lawyers can address each special needs issue specifically and individually.
A Special Needs Trust is then crafted by an attorney to assess and manage inheritances, litigation proceeds, and other resources while maintaining the child's or disabled adult's eligibility for the much desired public assistance benefits.
WHO CAN CREATE A SPECIAL NEEDS TRUST?
Generally, parents or others may fund a third party special needs trust the with resources which they deem appropriate for the trust with some limitations. The Special Needs trust assets are managed by a trustee for the benefit of the child or adult with the disability. On the other hand, first party special needs trusts are created with the assets of the disabled beneficiary, such as litigation proceeds, via a court order.
Government agencies generally honor special needs trusts, but many agencies have imposed stringent rules and regulations upon them. This is why it is of most importance that you, as parents consult an experienced attorney regarding current government benefit programs.
PURPOSE AND GOALS OF A SPECIAL NEEDS TRUST:
1. Maintaining the Special Needs person on government benefit, while they get benefits from the special trust.
2. Providing supplemental help to the special needs person. For example, special needs caregivers, special education costs, special needs tutors, child care, special needs caregiving agencies, special needs planning, special needs support networks, in-home special needs care, and many other things which the government does not pay for can be provided by the special needs trust.
3. A special needs trust is a method of managing the resources of a disabled or special needs minor or adult.
4. Creating peace of mind and certainty of finances for the parents of the special needs child.
TYPES OF SPECIAL NEEDS TRUSTS:
There are generally several types of Special Needs Trusts.
Third Party Special Needs Trust: This type of trust is created by a parent, grandparent or other persons for the benefit of the disabled person. In this type of trust, the parent or grandparent is the grantor. The assets which go into this type of trust come from a third party other than the disabled person.
First Party Special Needs Trust: This type of trust is created for benefit of the disabled individual, often with a court order, and contains repayment provisions for Medi-Cal. This type of trust can be created by a Conservator/Guardian/ Parent or Grandparent. This type of trust is generally used for litigation proceeds and sometimes for inheritances which were distributed to the disabled person by error. This type of trust is created in a Minor's Compromise or Disabled Person's Compromise proceeding.
a) Litigation and Structured Settlement Special Needs Trusts. (Litigation Special needs Trusts are often combined with Minors Compromise cases and Disabled Person's Compromise Petitions in California.
b) Qualified Settlement Trusts.
c) Litigation Proceeds Special Needs Trusts.
Pooled Trusts: A pooled trust is usually administered by a corporate fiduciary and is used in specific situations where the Medi-Cal or SSI beneficiary is 65 years old and over, or on where appropriate when the beneficiary will be receiving settlement proceeds. This type of trust has a corporate trustee.
Much care must be given to the language of the trust to prevent the loss of the needed services and assistance.
The disabled person is the beneficiary of the trust. The trust is discretionary and the trustee has absolute discretion to determine when and how much the disabled individual should receive. The disabled individual cannot be the trustee of this trust.
A Checklist of important items to know regarding a Third Party Special Needs Trust:
The SNT is established (grantor, settlor) by family members such as parents, grandparents, and sometimes by conservators of parents/ or grandparents. They are always formed by someone other than the person with the disability.
The SNT assets are managed by a trustee (and successor trustees) and NOT the person with the disability; In fact, the disabled beneficiary cannot be named as trustee of a special needs trust.
The SNT gives the trustee or successor trustee the absolute discretion to provide whatever assistance is needed. This means that no mandatory distributions can be made;
The SNT should prohibit giving the person with the disability more income or resources than permitted by the government;
The SNT is for supplementary purposes only; it should add to items provided by the government benefit program, and should not replace those government benefits;
The terms of the SNT define “supplementary needs” in general terms, as well as in specific terms related to the unique needs of the disabled individual;
The terms of the SNT may provide instructions for the disabled person's final and funeral arrangement;
The terms of the SNT will determine who should receive the remainder balance of the trust after the disabled person dies;
The creator of the SNT trust determines choices for successor trustees. These can be family members, friends or professional organizations who have the best interest of the person with the disability in mind; and
A Third party SNT is a spendthrift trust and generally protects the trust against creditors or government agencies trying to obtain funds from the disabled person.
There are lots of great local organizations that attend to the needs of special needs children such as AbilityFirst in Woodland Hills and in Los Angeles. We suggest you make a list of all resources available locally and ask about them.
Our offices serve the following areas: Los Angeles Calabasas Woodland Hills West Hills Sherman Oaks Tarzana Northridge North Hollywood Reseda Van Nuys Burbank Glendale West Los Angeles Pasadena Burbank Studio City Granada Hills Chatsworth Encino Simi Thousand Oaks Westlake Village Simi Valley Conejo Valley Camarillo Santa Monica Culver City Venice Agoura Hills Oak Park Irvine.
Call Sirkin Law Group regarding all SPECIAL NEEDS TRUST matters in Los Angeles. Special Needs Trust Attorneys Los Angeles. Call Mina Sirkin: 818.340.4479.
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