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Special Needs Trusts & Estate Planning

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Special Needs Trusts & Estate Planning In Newport Beach

If your child has a physical or mental disability and won’t be fully independent as an adult, carefully tailored planning is essential to ensure they are well protected once you’re no longer there. At Finn Legal Group, we specialize in special needs estate planning in Orange County, committed to safeguarding the future of your child with special needs. Our team offers a range of estate planning tools and strategies, specifically designed to meet the unique needs of children with special needs and their families, ensuring your child receives the care and support they need in your absence. Contact our office today at (49) 237-2030 to schedule a consultation and learn more about how we can help.

What is a Special Needs Trust?

The necessity for a special needs trust is primarily influenced by eligibility for public benefits. Once a disabled child turns 18, they become eligible for specific needs-based public benefits, such as Supplemental Security Income (SSI) and Medicaid (known as Medi-Cal in California). These programs provide crucial income and health insurance benefits but require the child to possess less than $2,000 in countable assets and be unable to work due to their disability.

The challenge arises for parents wishing to leave an inheritance to a child who is restricted to having only $2,000 in assets. The solution lies in establishing a special needs trust. This trust can securely contain any amount of money intended for the child’s use, without the child having direct access or control over the funds. Managed by someone else and legally irrevocable by the child, the trust’s assets do not count towards the child’s personal assets for public benefits eligibility. Thus, the child can still inherit and benefit from their parents’ legacy without forfeiting their right to receive essential public benefits, maintaining their eligibility by staying within the asset limit.

A Guide to Estate Planning for Special Needs

Special needs planning offers what a traditional will cannot: a strategic approach to care for your disabled child without compromising their eligibility for government benefits. Here are some crucial elements of special needs planning:

  • Central to special needs planning is the establishment of a special needs trust. This trust allows you to leave assets to your child with special needs in a manner that does not affect their eligibility for government assistance. It’s crafted to keep a clear division between your child’s finances and the trust assets. This is achieved by including specific trust provisions stating that the trust’s resources are not to be used for expenses already covered by government benefits.
  • Choosing a trustee for a special needs trust is a critical step. The selected trustee will manage the trust’s assets, ensuring they are used in ways that support your disabled family member without endangering their government benefit eligibility.
  • Integrating special needs planning into a comprehensive estate planning strategy is essential. This broader approach ensures you have the necessary funds to establish your loved one’s special needs trust. Your estate plan should support the accumulation of assets needed to sufficiently fund the trust for your child’s future needs.

The Importance Of Special Needs Planning

Special needs planning is centered on ensuring the well-being of your disabled child in the event you’re no longer able to provide care. As a parent to a child with special needs, it’s crucial to make thoughtful estate planning decisions that address your child’s legal, financial, and care-related needs comprehensively. Key motivations for engaging in special estate planning needs planning include:

Your Child Will Require Assistance Once You’re No Longer Here

If your child faces challenges in self-care due to a disability, it’s crucial to act now to secure their future care after you’re no longer there. Engaging in special needs planning is the most effective way to achieve this.

Money Management

Individuals with special needs often encounter difficulties in managing financial tasks, such as budgeting, money management, and future financial planning. While it might seem straightforward to leave a substantial sum of money to your disabled loved one, this approach may not serve your disabled child’s best interests. Through careful special needs planning, you can ensure that your child’s financial requirements are addressed in a way that maximizes their protection and maintains their eligibility for government assistance.

Protection of Your Child’s Inheritance

Special needs planning is designed to safeguard your child’s inheritance while preserving their eligibility for government assistance. By creating a special needs trust, you appoint a trustee who is committed to following the trust’s guidelines. This ensures that your child not only inherits their due share but also continues to receive any entitled benefits.

Special Needs Trusts

Creating a special needs trust is a crucial step in special needs planning. It allows your child to indirectly access funds for supplemental needs without risking eligibility for government benefits. In California, the two main types of special needs trusts are first-party and third-party.

A first-party special needs trust is funded with the disabled individual’s assets. These trusts are irrevocable, meaning they can’t easily be changed or canceled. After the trust beneficiary passes away, any remaining assets must repay the state for benefits the beneficiary received. However, since children usually don’t have significant assets, a first-party trust might not be the best option.

On the other hand, a third-party special needs trust is funded with assets from someone other than the beneficiary, making it a popular choice for supporting a child with disabilities. This trust can be part of a revocable living trust, a standalone trust, or a will.

While setting up a special needs trust might seem straightforward, it requires careful planning and execution. An improperly established trust can affect your child’s public assistance eligibility. Therefore, consulting with a special needs trust lawyer is advised to ensure the trust meets your child’s specific needs and maintains eligibility for benefits.


People with mental or physical disabilities often struggle to care for themselves or make crucial decisions. However, unless you become your child’s conservator when they turn 18, the law assumes they can manage these tasks. A conservator, appointed by the court, manages the financial and daily affairs of someone with physical or mental limitations. By applying for conservatorship, you can keep making personal and financial decisions for your child even after they become an adult. Without conservatorship, you lose the legal right to make these important decisions.

There are also alternatives to conservatorship that might work for you, depending on your situation. For instance, if your child can make some decisions, they might authorize you to make medical, legal, and financial decisions for them. Not every adult child with a disability needs a conservator.

Our experienced special needs lawyers will guide you through the planning process, helping you decide if conservatorship is right for your child. If it is, we’ll prepare all necessary documents to ensure you can continue making decisions for your child into adulthood.

Frequently Asked Questions

How Do I Leave Money to a Child With Special Needs?

When leaving money to a child with special needs, it’s crucial not to affect their eligibility for government benefits. Creating a special needs trust is the best solution, allowing access to funds without endangering benefit eligibility. In California, the main types are first-party trusts, funded by the beneficiary’s assets, and third-party trusts, funded by others. Third-party trusts are often used for children without their own assets. Establishing a special needs trust is the optimal way to securely provide for a child with special needs.

Does a Special Needs Trust Affect SSI?

A properly drafted special needs trust should not jeopardize SSI or Medicaid benefits. To avoid affecting SSI, the trust must not give cash or pay for food or shelter for the beneficiary, as this could reduce or eliminate their benefits. While the trust can cover most other expenses to supplement the beneficiary’s lifestyle, navigating the complex rules around special needs trusts and SSI benefits requires consulting an attorney for guidance.

Who Can Manage a Special Needs Trust?

A special needs trust offers individuals with disabilities the funds to improve their quality of life without affecting their eligibility for public benefits. Programs like SSI and Medicaid cover basics like food, medical care, clothing, and shelter. Special needs trusts supplement this aid by covering expenses for recreation, education, counseling, and special medical needs beyond basic necessities. Items a special needs trust might cover include:

  • Medical and dental expenses not covered by benefits
  • Special equipment, such as specially equipped vehicles and wheelchairs
  • Therapy services
  • Rehabilitation services
  • Training
  • Education
  • Travel
  • Recreation and entertainment
  • Electronic equipment
  • Appliances
  • Insurance
  • Companion payments
  • Legal or guardianship expenses
  • Burial costs

Contact a Special Needs Estate Planning Attorney

For parents of children with special needs, it’s crucial to take steps to protect your child’s future in your absence. The most effective way to ensure your child’s well-being is by seeking legal assistance. At Finn Legal Group, we’re dedicated to assisting your family in crafting a special needs plan tailored specifically to your unique situation. We understand the challenges you face and are committed to helping you navigate them. To start the special needs planning process and schedule a complimentary initial consultation, please reach out to us.