We have spoken before in this blog about the importance of considering the use of trusts when setting up an estate plan. Different trusts exist to serve the different needs of each testator in California.
For instance, parents of children with special needs have unique concerns. A child with special needs could have costs associated with raising him or her that a child without disabilities would not incur. Also, you may be receiving Medi-Cal and Supplementary Security Income to offset these costs, and want to ensure that these funds continue if you pass away.
The special needs trust exists for parents in exactly this situation. They can help the child qualify for Medi-Cal, SSI and other means tested government assistance programs. It can also create a fund to supplement that income, so that your child does not have to do without necessary medical care and therapies.
People’s lives and needs change over time, and special needs children are no exception. Their health may improve or grow worse, or they may become eligible for benefits they did not previously receive. As time passes, it is important for parents to keep their trust up to date to avoid the loss of benefits and care.
People who do not have a special needs child may benefit from setting up a different type of trust, to avoid estate taxes and distribute their assets as they wish after they pass on. A conversation with a estate planning attorney about their plan is a good first step.