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Special needs planning | The Estate Planning Law Firm

Special Needs Planning

Most parents of children with special needs understand the importance that special needs trusts play in the financial security of their child.
In situations where a person with disabilities is determined to have too much money/assets in his/her name, the government will determine the person is ineligible for vital government benefits such as Medicaid and SSI.
Because assets are held in a trust, and therefore are not considered assets for the purposes of determining a person’s wealth, special needs planning can help eliminate the problems created by “having too much.” Given the reality that assets placed in a special needs trust are not considered when determining if a person is eligible for government benefits, a special needs trust can mean the difference between being “able” and being “unable.” 

A Special Needs Trust (SNT) affords disabled peope with the opportunity to maintain eligibility for public assistance benefits, despite having excessive assets that would otherwise make the person ineligible for these government benefits.

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What types of Special Needs Trusts are there?

There are two types of Special Needs Trusts, First Party special needs trusts and Third Party Funded special needs trusts.

First Party Special Needs Trust

First party special needs trusts are funded from assets that are intended for a person with special needs (e.g., assets from an award or settlement, etc.). These trusts must include legal provisions which require notice and payback to the government upon the death of the trust beneficiary (or earlier termination of the trust). Upon death, or early termination of the SNT, The Department of Health Care Services (DHCS) is entitled to recoup up to an amount equivalent to the total amount of governmental medical assistance paid for by Medi-Cal on the trust beneficiary’s behalf.

Third Party Funded Special Needs Trust

A third party special needs trust is funded from assets that have never belonged to a person other than the trust beneficiary. A significant difference between third party and first party funded special needs trusts is the fact that third party special needs trusts are not subject to recovery by the Department of Health Care Services (DHCS). The special needs planning attorney at The Estate Planning Law Firm can work with you to establish your special needs plan. Contact The Estate Planning Law Firm at (714) 805-9229 for your Special Needs Planning.

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Contact The Estate Planning Law Firm today to develop the estate plan appropriate for your needs.

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Disclaimer: This site contains general information only It is not intended to be relied upon as legal advice, nor does it create an attorney-client relationship. This site is for advertisement purposes for Michael J. Holmes, Attorney at Law.

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