California Special Needs Trust Lawyers

Helping Clients Safeguard the Financial Future of Their Loved One

If you want to make sure your family members are financially provided for even after your death, you’re not alone, as most people create their estate plans with this goal in mind. However, if you have a special needs child or relative, you face a unique dilemma when it comes to estate planning. This is because leaving your special needs loved one the generous inheritance they deserve could risk making them ineligible for the government assistance they rely on, yet reducing the amount they inherit could leave them unable to afford the quality of life you want for them.

Fortunately, there is a feasible solution that ensures the financial well-being of a loved one with special needs, and it’s called a Special Needs Trust (SNT). If you’re unfamiliar with this estate planning tool, you should contact the Sheela Stark Law Group, APC, to speak with a Southern California attorney about how a special needs trust works and how to set up this trust for your loved one. If you have legal questions or need help regarding estate planning for loved ones with special needs, call our California estate planning law firm today for a free consultation.

How Do I Leave an Inheritance for My Loved One With Special Needs?

For most people, having basic estate planning documents in place seems to be enough to ensure their assets are properly distributed and their loved ones are financially taken care of after their death. Documents such as wills, living wills, and advance healthcare directives usually clarify how to handle the estate and healthcare decisions when the person is incapacitated or passes away. However, when you have a loved one who is disabled or has special needs, estate planning is not that simple.

While you likely want to leave your special needs loved one a decent inheritance that will take care of their financial needs after their caretakers are no longer around, doing so without careful planning may actually leave your loved one in a tough situation with different results than intended. This is because special needs individuals are eligible for government benefits, such as Supplemental Security Income (SSI) and Medi-Cal, but only if they meet the income requirements for these programs. So, if they receive a lump-sum inheritance payment or other assets that can be counted as income, they may lose their eligibility for these critical benefits.

In other words, simply leaving an inheritance for your loved one through basic estate planning tools such as a will is typically a risky move that could do more harm than good. Instead, you should take extra steps in the process of estate planning, making sure to put the proper tools in place in such a way that you can leave them an inheritance without hurting their ability to receive public benefits. Our California special needs trust attorneys can assist with this, so call our law firm today to learn more.

What Kind of Benefits Can a Special Needs Person Get From the Government in California?

In California, those who are blind or suffer from a disability that makes them unable to work and afford basic living expenses may be eligible for certain federal and state benefits. The most common benefit for a special needs person is Supplemental Security Income, or SSI. The SSI program is run by the federal government and allows eligible disabled individuals to receive a monthly payment to help cover basic expenses, such as food, clothing, housing, and utility bills. To qualify for SSI, a disabled person must meet specific income requirements, such as not making more than $987 a month in unearned income as of 2025. They also cannot own more than $2,000 in assets, or $3,000 if they’re married.

In addition, the state of California also offers State Supplemental Payments (SSP), which adds a certain amount ($239.20 for an individual as of 2025) to a qualifying individual’s SSI payments. California also provides automatic eligibility for Medi-Cal for anyone eligible to receive SSI and SSP benefits. Medi-Cal is California’s version of Medicaid and offers free health insurance for the disabled, blind, and those with low income and over 65 years old.

If your loved one depends on these programs to afford medical care, food, housing, and other expenses, leaving them money, real estate, or other assets in a will could push them above the maximum limit for government assistance. This is why it’s essential to talk to a skilled estate planning attorney before leaving an inheritance to a disabled beneficiary. When you call our legal team to discuss your estate plan, we’ll review your options, which may include an irrevocable trust, revocable living trust, and other estate planning tools. Contact us today to get started.

What Is a Special Needs Trust?

A Special Needs Trust (SNT) is a living trust created specifically to benefit a person with special needs. Also called a supplemental needs trust, this type of trust is designed to supplement – not replace – government assistance and provide a better quality of life for a person with disabilities or special needs.

A special needs trust is usually created by the special needs person’s relatives and can be funded with a variety of assets, including cash, real estate, stocks, bonds, and life insurance. In order to work as intended, an SNT usually needs to be irrevocable – meaning it cannot be easily modified or canceled – and the assets placed into the trust become the property of the trust. This way, assets in a special needs trust are not included as countable assets and will likely not impact the beneficiary’s eligibility for public assistance benefits.

An irrevocable special needs trust is managed by a trustee, who must be someone other than the beneficiary. The trustee is responsible for managing the trust’s assets and distributing funds according to the beneficiary’s wishes. The trust funds can be used to pay for medical expenses, transportation, education, job training, recreational activities, and other needs not typically covered by SSI, allowing the beneficiary to maintain a quality of life.

A supplemental needs trust can also protect assets from creditors and financial abuse by a caretaker. If you’re interested in the benefits of special needs trusts, contact our law firm to determine if this type of trust will meet your needs as you do everything possible to provide for your special needs beneficiary.

Why Were Special Needs Trusts Created?

Special needs trusts were created in the late 1970s to offer a way for families to provide for the needs of a family member with special needs without interfering with vital government benefits, such as SSI and Medicaid. Prior to the creation of special needs trusts, family members had only two options if they wanted to provide for the needs of a special needs family member. They could leave a lump sum inheritance to the special needs person, potentially resulting in the person losing vital public benefits until all inherited assets were spent down. Alternatively, they could disinherit the special needs person, which was an unfavorable option that would leave no financial resources to the family member who needed them the most.

As a result, special needs trusts have offered a way for families to provide for the needs of a special needs family member and give them an inheritance while still maintaining their eligibility for government assistance. With a special needs trust, the family member has access to the trust assets, but the assets do not count against their eligibility for government benefits. This is because the special needs trust is usually an irrevocable trust, which means the assets it holds are owned by the trust and not by the beneficiary. If you’re considering protecting your special needs child or other relative through this type of trust, it’s time to talk to a Los Angeles County attorney who can offer the legal advice you need. Call our Southern California law firm to speak with trusted special needs planners today.

What Are First-Party and Third-Party Special Needs Trusts, and Which One Should I Choose?

If you’re thinking about creating a special needs trust for your loved one, it’s important to know there are two main types to choose from: first and third-party special needs trusts. First-party special needs trusts are funded with money or assets from the beneficiary. This means the disabled person uses their own assets to fund their special needs trust, typically using money from an inheritance or personal injury award. A first-party special needs trust can be created by family members, friends, a court, or the beneficiaries themselves, provided they are mentally capable of doing so.

On the other hand, third-party special needs trusts are funded with money or assets from someone other than the beneficiary. This can be a family member, friend, or any other person who wishes to provide financial support for the beneficiary. Generally, third-party special needs trusts are more common than first-party trusts, since families often want to care for their special needs loved ones financially and have the income and assets to do so.

Additionally, third-party special needs trusts tend to be easier to set up and are not subject to the strict rules and regulations of a first-party SNT. Third-party SNTs may also offer more advantages than first-party special needs trusts if they are created in advance, before the parents or family members responsible for the care of a special needs loved one pass away.

Creating a trust in advance can be an effective way of allowing a special needs person to access their inheritance without disrupting their ability to receive government benefits. As always, it is best to consult a special needs trust attorney to discuss your case and learn which type of special needs trust may be right for you. If you’re ready to learn more about special needs trusts from a skilled financial planner serving Los Angeles County and beyond, call our law firm today.

What Is a Payback Clause, and How Does It Affect the Funds in a Special Needs Trust?

In addition to benefits eligibility, another important aspect to be aware of when considering a special needs trust is the payback clause. Certain SNTs (such as some kinds of first-party SNTs) are created with a required payback clause that establishes that any assets that remain in the trust after the beneficiary’s death should be used to reimburse the government for the Medi-Cal benefits received by the beneficiary.

In other words, if there are any funds remaining in the special needs trust after the death of the person who was the trust beneficiary, these funds may need to be used to repay the government for Medi-Cal benefits. This is important to consider, especially if the goal of the SNT was to preserve inherited assets for the beneficiary’s use and to pass them on to another beneficiary after the primary beneficiary dies. In this case, the payback clause might make it impossible to have any assets to pass on to the next person, as the government will likely seize them.

This is why it’s crucial to consult with a special needs trust and take time to make adequate estate plans ahead of time to ensure you can leave your loved one money to pay for costs that go beyond medical expenses. If you’re looking to leave a legacy for your loved one with special needs, and you don’t want to risk eliminating their access to medical services, food, and other necessities, contact our law firm to speak with a knowledgeable California special needs planning attorney.

What Kinds of Assets Can Be Placed in an SNT, and How Can the Beneficiary Access Them?

In order to realize why special needs trusts are needed, you need to consider how an inheritance could affect your disabled beneficiary in the future. In general, owning items such as a car, home furnishings, and other everyday personal items will not affect a disabled individual’s eligibility for benefits. However, receiving a lump sum of cash or sizable assets can result in the loss of those benefits.

So, instead of giving the money or assets directly to the special needs person, the assets may be placed in the special needs trust. Because the special needs trust is irrevocable, the assets are now held by the special needs trust and do not count against the income threshold for public benefits.

A special needs trust can hold a variety of assets like any other trust. Money, financial assets, real estate, stocks and bonds, and any type of asset can be placed in the trust and used by the beneficiary. There is an important caveat that trustees and beneficiaries should be aware of. While the beneficiary is free to use trust assets for their own benefit, they need to be careful not to withdraw money from the trust, as the money taken from the trust could be counted as income and hurt their eligibility for public benefits.

For example, instead of the trustee withdrawing $100 from the trust and giving it to the beneficiary for them to pay bills or purchase clothes, the trustee needs to have the SNT itself pay for those expenses. The same goes for any other expenses that special needs trusts can be used for, such as a specially equipped van, therapy, concerts, movie tickets, educational courses, transportation, haircuts, home appliances, and more. If you or your relatives have questions about using a supplemental needs trust properly, contact our law firm today to get answers from a caring attorney.

How Can California Special Needs Trust Attorneys Help with Special Needs Planning?

It is crucial to fully understand how an SNT works and how to access it, so you should consult an attorney who will walk you through the steps of creating and using this type of trust. For years, the Sheela Stark Law Group, APC has been providing legal guidance to clients across Los Angeles County and nearby areas, ensuring they plan their estate in such a way that their special needs relatives don’t lose their access to public assistance.

If you are considering creating a special needs trust or want to know what other options might work for your circumstances, call our law firm today at 909-675-1545. We’d be happy to give you a free consultation so you get the comprehensive special needs planning guidance you’re looking for.