Planning for Disabled Beneficiaries California | Guide

September 19, 2024

Did you know a person can’t have more than $2,000 in assets to get government benefits¹? This fact shows how vital estate planning is for people with disabilities in California. If you have a family member with special needs, it’s key to keep them eligible for important benefits like Supplemental Security Income (SSI) and Medicaid (Medi-Cal). The Elder & Disability Law Firm, APC, in Redlands, California, helps families in places like Rancho Cucamonga, Riverside, and Palm Springs with this complex issue¹.

Contents hide

1 Key Takeaways

2 Providing for a Loved One with Disabilities

2.1 Importance of Estate Planning for Disabled Beneficiaries

2.2 Challenges in Maintaining Government Benefits Eligibility

3 Understanding Government Benefits for the Disabled

3.1 Supplemental Security Income (SSI)

3.2 Medicaid (Title XIX)

4 Special Needs Trusts: A Viable Solution

4.1 What is a Special Needs Trust?

4.2 Types of Special Needs Trusts

5 Planning for Disabled Beneficiaries California

6 Third-Party Special Needs Trusts

6.1 Funding and Asset Distribution

7 First-Party Special Needs Trusts

8 Pooled Special Needs Trusts

9 Conclusion

10 FAQ

10.1 What is the importance of estate planning for disabled beneficiaries?

10.2 How can I ensure my disabled family member maintains their government benefits eligibility?

10.3 What is Supplemental Security Income (SSI) and how does it work?

10.4 What is a special needs trust and how can it help my disabled family member?

10.5 What are the different types of special needs trusts?

10.6 How can I get help with planning for my disabled beneficiaries in California?

11 Source Links

Key Takeaways

To receive government benefits, a person cannot have more than $2,000 in assets¹.
Special needs trusts come in three types: first-party, third-party, and pooled¹.
Special needs trusts cannot be established for anyone over the age of 65¹.
Leaving assets directly to a special needs child can disqualify them from government benefits¹.
Siblings instructed to care for a disabled sibling may not have a legal obligation to do so¹.

Having a child or loved one with special needs means they need to keep getting government benefits like SSI and Medi-Cal. If you give them cash or assets, they could lose these benefits¹. That’s why special needs trusts are important. These trusts, which can be first-party, third-party, or pooled, let you support your loved one without taking away their government help¹².

Dealing with estate planning for disabled beneficiaries in California can be tough. The Elder & Disability Law Firm, APC, can help you through it. They know a lot about special needs trusts, ABLE accounts, and conservatorships. They make sure your loved one is taken care of, even after you’re gone¹.

Providing for a Loved One with Disabilities

Looking after a family member with disabilities is a big responsibility that looks ahead. Estate planning for disabled beneficiaries is key to securing their future. It helps keep them eligible for important government benefits like Supplemental Security Income (SSI) and Medi-Cal.

Importance of Estate Planning for Disabled Beneficiaries

In California, a parent or grandparent loses the right to make financial or health care decisions for a disabled adult child at age 18³. This shows why estate planning is vital. It protects a disabled family member and secures their future well-being.

Challenges in Maintaining Government Benefits Eligibility

One big challenge in estate planning for the disabled is keeping them eligible for government benefits⁴. In 2014, the resource limit for SSI in California was $2,000 for one person. If a beneficiary’s parents live with them and are unmarried, under 18, their assets could be seen as the beneficiary’s⁴. It’s crucial to plan carefully to avoid losing the disabled individual’s eligibility for government benefits.

A special needs estate planning strategy, like a Special Needs Trust, can help. It’s a way to manage these complex issues and protect a disabled loved one’s finances⁴. By understanding supplemental security income and Medi-Cal rules, families can make smart choices to secure their disabled family member’s future.

“A Special Needs Trust is a highly technical mechanism that should be created by an attorney to avoid any oversight that could burden the beneficiaries.”⁵

Understanding Government Benefits for the Disabled

Getting through the maze of government benefits for the disabled can feel overwhelming. But, it’s key to know about Supplemental Security Income (SSI) and Medicaid (Title XIX). These programs offer vital support.

Supplemental Security Income (SSI)

SSI gives money to people with disabilities that will last over a year or end in death⁶. To get SSI, the SSA checks your income and what you own, like cash, bank accounts, and property⁷. In 2024, you can’t have more than $2,000 if you’re single or $3,000 if you’re with someone to get SSI⁷.

Medicaid (Title XIX)

Medicaid, or Title XIX, gives healthcare to people with disabilities. Often, if you get SSI, you also get Medicaid, which helps people apply for SSI⁸. Like SSI, Medicaid has its own rules about what you can own⁷.

It’s important to know how these programs work and their rules. This helps make sure your loved one with disabilities keeps their financial and healthcare support⁸.

“Careful planning and strategic use of government benefits can make a significant difference in the quality of life for individuals with disabilities.”

Special Needs Trusts: A Viable Solution

A special needs trust, or supplemental needs trust, helps support people with disabilities without affecting their government benefits like Medi-Cal and SSI⁹. You can put different assets into these trusts, like cash, investments, and even life insurance money⁹.

What is a Special Needs Trust?

A special needs trust is a way to improve someone’s life with money set aside by a trustee⁹. The money can pay for things like medical care, education, and fun activities that government benefits might not cover⁹. This way, the person gets extra help without losing their government support⁹.

Types of Special Needs Trusts

In California, there are three main kinds of special needs trusts:

Third-Party Special Needs Trusts are set up by family members to help a disabled person. They don’t make the beneficiary pay back government benefits when they pass away⁹.
First-Party Special Needs Trusts use the disabled person’s own money, like from an inheritance or a lawsuit. They might need to pay back some Medi-Cal benefits later, but they help the beneficiary get government aid⁹.
Pooled Special Needs Trusts are great for people with smaller estates. They combine money from many people, managed by a non-profit, offering the same benefits as other trusts¹⁰.

It’s important to plan carefully and get advice from an estate planning lawyer to set up a special needs trust right¹⁰.

“Special needs trusts allow a disabled individual to receive both an inheritance and government benefits at the same time, making their life better without losing their important support.”⁹

Planning for Disabled Beneficiaries California

Planning for estate planning with a disability can seem tough. But, the Super Attorneys Of Irvine are here to help. They make sure your loved one’s needs are covered while keeping their government benefits¹¹. If you live in Redlands, California, or nearby areas like Rancho Cucamonga, Riverside, or Palm Springs, their skilled estate planning lawyers can create a plan for your special needs family members.

For planning for disabled beneficiaries in California, Special Needs Trusts¹¹ are key. There are two types: Third-Party Special Needs Trusts and Self-Settled Special Needs Trusts¹¹. But, Support Trusts might affect your loved one’s eligibility for important programs like Supplemental Security Income (SSI) and Medicaid¹¹.

The Super Attorneys Of Irvine team knows how to handle estate planning for the disabled¹². They can guide you through the tricky parts of special needs planning in California¹². They’ll help you understand how to keep your loved one eligible for government benefits, the need for irrevocable trusts, and the role of a trustee in managing a special needs trust¹².

If you’re starting or updating your planning for disabled beneficiaries journey, the experts at Super Attorneys Of Irvine are here to help¹¹. They know all about the legal and financial parts of planning. They offer the guidance and resources you need to make sure your loved one is taken care of and financially secure¹¹. Check out businesslawyersirvine.com to see how they can help you with planning for disabled beneficiaries in California.

“The team at Super Attorneys Of Irvine has been instrumental in helping us navigate the complex world of estate planning for our disabled child. Their expertise and compassionate approach have given us peace of mind and confidence in securing our loved one’s future.”

Types of Trusts	Impact on Government Benefits
Support Trusts	Can impact eligibility for SSI and Medicaid¹¹
Special Needs Trusts (Third-Party and Self-Settled)	Keep eligibility for public assistance benefits¹¹

Third-Party Special Needs Trusts

A third-party special needs trust (SNT) helps those who want to support a loved one with disabilities. It’s different from a first-party SNT, which uses the beneficiary’s own money. A third-party SNT is set up and funded by someone else¹³.

This type of trust is great because it doesn’t make the government take back money after the person with disabilities passes away. The person who set up the trust gets to decide what happens to any money left over. They might give it to family or charity¹³.

Funding and Asset Distribution

You can put money into a third-party SNT from many sources like cash, stocks, houses, jewelry, or investments¹³. Making a will or living trust to give assets to a special needs trust can skip the need for court in the future¹³.

Money from this trust can pay for many things not covered by Medi-Cal or SSI, like health care, help at home, getting around, home security, and more¹³. This lets the person with disabilities live better without losing their government help.

Remember, a person getting Medi-Cal or SSI can’t have more than $2,000 in assets, except for a home, car, and some other things¹³. A third-party SNT lets people help their loved ones without taking away their government benefits¹³.

With more people living with disabilities in the U.S., around 61 million adults¹⁴, planning for the future with trusts like these is more crucial¹⁴¹³.

First-Party Special Needs Trusts

For people with disabilities, first-party special needs trusts (SNTs) are a key part of estate planning¹⁵. These trusts use the person’s own assets, like money from injury settlements or inheritances¹⁵. The trust can be set up if the person is under 65 when it starts¹⁵.

First-party SNTs are different from others because they’re funded by the person with special needs¹⁵. After the person passes away, any money left in the trust must pay back the state for help given during their life¹⁵. This rule is called the “payback” requirement and makes sure the trust doesn’t help avoid paying for the person’s care¹⁵.

The main advantage of a first-party SNT is that it doesn’t affect the person’s Medicaid or SSI benefits¹⁵¹⁶. This means people with disabilities can keep their government aid and still use extra money for things like cleaning, getting around, and legal help¹⁶.

Creating a first-party SNT is a detailed process that needs legal experts in special needs planning¹⁶. Working with these experts ensures the trust meets the person’s needs and follows the rules¹⁶. This way, families can make sure their loved ones with disabilities have a secure financial future.

Pooled Special Needs Trusts

For people with disabilities and small assets, a pooled special needs trust is a good choice for estate planning¹⁷. These trusts are run by non-profits and let each person’s account track their own money¹⁷. They have professional trustees who make sure the money is used right, making it easy for those with small estates¹⁷.

Money for these trusts can come from many places, like work, legal settlements, or gifts¹⁷. This means people under 65 with disabilities can get money in a trust¹⁷. They can use it for things Medicaid or SSI don’t cover, like special treatments or dental care¹⁷. Using a pooled trust can improve their life quality and keep them eligible for public aid¹⁷.

A 63-year-old can use a d4C trust to keep assets and still get Medicaid after getting an inheritance¹⁷. The Elder & Disability Law Firm, APC, helps Southern California folks set up these trusts¹⁷.

Pooled trusts are a smart choice for small estates, keeping assets safe and helping people keep their government benefits¹⁷. They’re great for individuals and families dealing with estate planning for disabled loved ones¹⁷.

Conclusion

Planning for your disabled loved ones in California is crucial. Estate planning attorneys like Super Attorneys Of Irvine offer valuable guidance¹⁸. They help you understand how to protect your loved one’s care and well-being after you’re gone¹⁹.

If you live in Redlands, Rancho Cucamonga, Riverside, or nearby, Super Attorneys Of Irvine can help¹⁸¹⁹. They know how to manage estate planning for disabled people in California. They ensure your loved one’s government benefits stay safe and create a plan for their needs¹⁸¹⁹.

Working with a specialized estate planning attorney gives you peace of mind¹⁸¹⁹. Your disabled loved one’s future is secure. Contact Super Attorneys Of Irvine for a consultation today¹⁸¹⁹.

FAQ

What is the importance of estate planning for disabled beneficiaries?

Estate planning helps make sure your loved ones are taken care of after you’re gone. If you have a family member with special needs, it’s key to plan carefully. This ensures they get the care they need without losing government benefits like Supplemental Security Income (SSI) or Medi-Cal.

How can I ensure my disabled family member maintains their government benefits eligibility?

Government benefits often have strict rules about assets. If you leave your disabled family member with cash or assets, they might lose their benefits. Special needs trusts are a good way to keep their assets low enough to qualify for benefits while still meeting their needs.

What is Supplemental Security Income (SSI) and how does it work?

SSI is a program for people with disabilities that’s expected to last over a year or until death. The Social Security Administration checks if you have enough money and resources to qualify. You can only have ,000 or less in countable resources by yourself, or ,000 for a couple.

What is a special needs trust and how can it help my disabled family member?

A special needs trust, or supplemental needs trust, is set up to support someone with disabilities without affecting their government benefits. You can put different kinds of assets into the trust. The trustee then uses the money for things that make life better, like medical care, therapy, and personal items.

What are the different types of special needs trusts?

There are three main kinds of special needs trusts: third-party, first-party, and pooled trusts. Each has its own set of rules and things to consider.

How can I get help with planning for my disabled beneficiaries in California?

If you’re in or near Redlands, California, and have a disabled family member, contact Super Attorneys Of Irvine. An estate planning lawyer can guide you through planning for your disabled loved one’s future. They’ll make sure their needs are covered while keeping their government benefits safe.