Estate Planning Lawyer Los Angeles

Special Needs Trust

A special needs trust is a trust that provides supplemental assistance to a disabled person or a mentally disabled person.  Special needs trusts are not able to be used for support purposes, such as food and shelter.   One of the benefits of a special needs trust is that the beneficiary doesn’t lose any public assistance they receive from the government.

Things that a special needs trust can be used for include non support items that the beneficiary uses such as computers, furniture, a vehicle including insurance and maintenance, travel expenses and a travel companion, which include accommodations, meals and the travel costs themselves;  toiletries and cleaning supplies, telephone, cell phone and cable expenses, and food supplements, but not food itself.

Things such as utilities, rent, and groceries are not acceptable for payment by the trust as these are considered support items.  It’s important to note that items purchased by the trust need to be used by the beneficiary.  If the beneficiary wanted to buy something that would normally be approved by the trust, but is not for their personal use, it is possible that the trustee would deny approval for that item.

There are some basic “rules” that the trustee and the beneficiary of a special needs trust follows.   The beneficiary should always make the trustee aware of needs before purchasing them.  This way the beneficiary doesn’t create debt, expecting the trust to pay for it.

All decisions are up to the trustee of the special needs trust.  The beneficiary can ask for items, but if the trustee feels they are not in compliance with the trust, or that they are not wise purchases, the beneficiary’s request can be denied.

No cash should be given to the beneficiary of the special needs trust.  If there are purchases to be made, the trustee needs to make the purchases, and give the items themselves to the beneficiary.  By giving the beneficiary any cash, it is considered to be support by the government and can affect their public assistance.

Choosing a trustee of a special needs trust is very important.  Since they will be responsible for all purchases from this trust, it needs to be someone who knows the beneficiary.  In most cases a family member is the trustee of such a trust.  In the event the trust is for a child, there needs to be things in place for other trustees to step in to replace the initial trustee, should the need arise. An example of this would be if the trustee passes away or moves away and the beneficiary requires a new trustee.

Taking care of this possible need ahead of time saves a lot of headache should the need arise.  If this is not specified in some form ahead of time, and the trustee passes away, the courts will intervene and randomly choose someone which is really not what is ideal for the beneficiary.