Special Needs Trust Attorney in California
Planning for the future of a loved one with special needs, including those with developmental disabilities and other special needs, requires meticulous consideration, especially when it comes to their financial well-being and long-term care. The nuances of this special needs planning process are critical. At Hyden Zakheim, LLP, we recognize the growing need to secure a sound financial future for individuals with special needs. Our special needs attorneys have vast experience with estate plans and recognize the importance of comprehensive long and short-term care planning. This involves establishing a secure legal and financial framework to ensure the continued care and support of individuals with disabilities, particularly about their long-term care and financial needs. Also, of paramount importance is to foster independence, health, and happiness of the loved one living with special needs to ensure that the families’ funds are there to enhance the quality of life for their loved one and that public benefits are maximized to take care of essential or basic needs such as food, housing, and medical care.
Hyden Zakheim, LLP
Offers Guidance with Passion AND Personal Experience
Senior Attorney Amanda Sinclair has an adult child with complex special needs, so she has experienced the same journey that many families with special needs face. Whether it’s early in the process, such as receiving a diagnosis, attending early intervention services, navigating the school years, preparing for the transition to adulthood, or dealing with the challenges of early adulthood or later stages of life, she has walked alongside these families. Amanda has supported families through all of these stages, including the loss of a loved one with special needs. She is passionate about demystifying the process, easing the anxiety and fears that families often have when planning for a future in which they will no longer be there to care for and protect their loved one. Amanda empowers families with tools to understand the rules and to plan effectively for their loved ones’ futures.
With attorney Amanda Sinclair and the entire Hyden Zakheim, LLP special needs planning team by your side, you are working with a team with deep personal experience and empathy for families with special needs, having navigated the same journey. Ms. Sinclair’s passion for simplifying complex legal processes and providing families with the tools to secure their loved ones’ futures makes her a trusted and compassionate advocate.
Hyden Zakheim, LLP is Proud to Serve all of California
Understanding Special Needs Trusts with Our Special Needs Trust Attorney
A Special Needs Trust (SNT), also known as a supplemental needs trust, is a fiduciary arrangement designed to safeguard the assets and finances of a person living with special needs or disabilities, also referred to as the beneficiary. This type of trust ensures that the individual can access essential support services without jeopardizing their eligibility for crucial government benefits, such as Supplemental Security Income (SSI), Medi-Cal/Medicaid, public assistance benefits, and Social Security disability insurance (SSDI). This way we strive to have public benefits pay or partially pay for essential or basic needs and the funds held in the SNT are used to maximize the beneficiary’s quality of life.
Managed by a designated trustee, the SNT provides a structured mechanism for managing assets and making distributions to cover the beneficiary’s special or unique needs. These needs may encompass a wide range of expenses, including medical care, housing adaptations, specialized equipment, education, clothing, personal items, and recreational activities.
At Hyden Zakheim, LLP, our compassionate special needs trust lawyers work closely with families to create tailored Special Needs Trusts that address the specific requirements and future goals of each individual with compassion. Customizing these trusts ensures that the beneficiary’s quality of life is enhanced while safeguarding their eligibility for vital government benefits.
The Importance of a Special Needs Trust in Estate Planning
Integrating a Special Needs Trust into an estate plan is essential to safeguard the financial well-being and quality of life of someone with disabilities. Without an SNT, an inheritance or other financial gifts could inadvertently disqualify the individual from receiving vital government benefits.Special needs planning through an SNT ensures that the beneficiary can access necessary support and maintain their financial security while preserving their eligibility for essential public assistance programs. By working with our experienced special needs trust attorney at our law firm, Hyden Zakheim, LLP, families can create a tailored plan that addresses their loved one’s specific needs and circumstances.
How a Special Needs Trust Complements Government Assistance Programs
assistance programs. The trust assets are not considered countable income or resources, preventing any disruption to essential government benefits like Social Security or Medi-Cal/Medicaid.Here's how an SNT complements public benefits:
Preserves Eligibility: SNT funds are not considered beneficiaries' assets, ensuring continued access to needs-based government benefits.
Covers Additional Needs: The trust can cover expenses not typically covered by public programs, enhancing the beneficiary’s quality of life.
Offers Financial Security: An SNT provides a safety net beyond basic needs, ensuring a more secure future for the beneficiary.
By supplementing rather than supplanting public assistance, SNTs play a vital role in enhancing the financial stability and overall well-being of individuals with disabilities.
Key Features of the CalABLE Savings Program
In addition to Special Needs Trusts, California residents have access to the CalABLE savings program. Launched in December 2018, CalABLE provides eligible individuals with disabilities the opportunity to save for disability-related expenses without affecting their eligibility for public benefits.
CalABLE accounts function similarly to 529 college savings plans but are specifically tailored to meet the financial needs of individuals with disabilities. These accounts offer tax advantages and can significantly contribute to the long-term financial security and independence of beneficiaries.
Eligibility and Benefits of CalABLE for Californians with Disabilities
The CalABLE program is available to California residents with disabilities who are eligible for, or receiving, benefits under the Social Security Administration's disability programs, including SSI or SSDI. The qualifying disability must have manifested before the age of 26* (changing to age 46 in 2026).CalABLE accounts come with various benefits, including:
Tax-Advantaged Savings: Earnings grow tax-deferred, and withdrawals for qualified disability expenses are tax-free.
Asset Limit Flexibility: Account balances up to $100,000 are excluded from the SSI $2,000 asset limit.
Control and Flexibility: Beneficiaries have control over their accounts, choosing investments and making withdrawals as needed.
*To be eligible for a CalABLE account, an individual must have a significant disability that began before age 26 (changing to age 46 in 2026). Eligibility includes U.S. citizens who receive Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI), or those with a physician’s diagnosis. An authorized representative can open an account on behalf of the beneficiary if certain conditions are met, such as having legal guardianship or Power of Attorney. For more details, visit CalABLE Eligibility.
Depending on the unique circumstances of your special needs planning matter, there are differing account management options that our special needs planning attorneys are happy to discuss with you.
Integrating CalABLE with Special Needs Trusts for Optimal Financial Planning
CalABLE accounts and special needs trusts can work together effectively as components of a comprehensive financial plan for a beneficiary with disabilities. While an SNT offers greater flexibility in terms of asset protection and permissible expenses, a CalABLE account provides an additional avenue for tax-advantaged savings.For instance, funds within a CalABLE account can be used to supplement expenses covered by the special needs trust, providing even greater financial security and flexibility. The integration of these two tools ensures that the beneficiary's needs are met, while also maximizing their financial resources and planning opportunities.
This approach underscores the importance of working closely with an experienced special needs trust attorney at Hyden Zakheim, LLP, in addition to financial professionals to develop a well-coordinated plan that leverages the benefits of both CalABLE and special needs trusts.
Hyden Zakheim, LLP
Essential Components of a Special Needs Trust
Creating an effective and legally sound Special Needs Trust necessitates careful attention to several critical components. The trust document should clearly outline the purpose of the trust, identify the beneficiary and their specific needs, and designate a responsible trustee to manage the assets.
Other essential components include outlining the permissible uses of trust funds, establishing a mechanism for ongoing management and investment of assets, and specifying a plan for distributing remaining funds upon the beneficiary’s passing. Clearly defining these elements ensures the trust fulfills its intended purpose of providing for the beneficiary while adhering to legal and regulatory requirements.
Types of Assets Suitable for Funding a Special Needs Trust
A wide range of assets can be used to fund a Special Needs Trust, ensuring the beneficiary’s long-term financial security. Common types of trust assets include:
Cash and Savings:
Liquid assets provide immediate financial support and can be used for various expenses.Securities:
Stocks, bonds, and mutual funds offer growth potential and diversification for the trust's portfolio.Real Estate:
Property can generate rental income or be sold to provide substantial funds for the beneficiary.Life Insurance:
Proceeds from a life insurance policy can provide significant financial resources upon the policyholder's death.For beneficiaries with special needs, it is crucial to establish a Special Needs Trust to receive Income Retirement Account (IRA) assets. This trust can help maintain the beneficiary’s eligibility for government benefits while providing long-term financial security. Trustees must navigate complex rules to ensure distributions are made according to the beneficiary’s needs and regulatory requirements.
The SECURE Act has introduced significant changes affecting retirement plans or IRA beneficiaries, including those with special needs. Individuals inheriting IRAs have special considerations under this act, particularly in terms of distribution rules and tax implications, including the new 10-year rule for distributions.
Under the SECURE Act, individuals with special needs who inherit IRAs are granted special considerations. They are not required to deplete or withdraw the funds within 10 years, unlike other beneficiaries. This provision allows for a more sustainable approach to managing the inherited IRA and ensuring long-term financial security for individuals with special needs. By leveraging this unique aspect of the SECURE Act, families can create lasting financial plans that prioritize the beneficiary’s well-being even after their passing. This is a crucial component of planning for special needs – how to utilize existing laws to stretch your hard-earned money to benefit your loved one living with special needs.
The specific assets used to fund the SNT, including an IRA, will depend on the individual’s circumstances and the overall financial goals of the trust. It’s important to note that transferring assets to an SNT may affect the beneficiary’s eligibility for certain needs-based government benefits like Supplemental Security Income. Consulting with an experienced special needs planning attorney is essential to determine which asset transfer strategies are most appropriate.
Selecting the Right Trustee for Managing the Trust
Choosing the right trustee is a crucial aspect of establishing a Special Needs Trust. The trustee bears the fiduciary responsibility to manage the trust assets prudently, act in the best interests of the beneficiary, and comply with all legal and tax requirements.
While family members or close friends may seem like suitable candidates, it’s important to consider their financial expertise, investment knowledge, and ability to navigate complex legal matters. Professional trustees, such as trust companies, banks, or experienced attorneys, offer expertise in trust administration, investment management, and compliance. It is also important to understand and evaluate how serving in the role of trustee may impact family dynamics and relationships.
Selecting a successor trustee is equally vital to ensure seamless continuity in managing the trust should the initial trustee become incapacitated or unable to fulfill their duties. Appointing a successor trustee provides peace of mind, knowing that the trust’s management will remain in capable hands throughout the beneficiary’s lifetime.
Choosing the right trustee is a crucial aspect of establishing a Special Needs Trust. The trustee bears the fiduciary responsibility to manage the trust assets prudently, act in the best interests of the beneficiary, and comply with all legal and tax requirements.
While family members or close friends may seem like suitable candidates, it’s important to consider their financial expertise, investment knowledge, and ability to navigate complex legal matters. Professional trustees, such as trust companies, banks, or experienced attorneys, offer expertise in trust administration, investment management, and compliance. It is also important to understand and evaluate how serving in the role of trustee may impact family dynamics and relationships.
Selecting a successor trustee is equally vital to ensure seamless continuity in managing the trust should the initial trustee become incapacitated or unable to fulfill their duties. Appointing a successor trustee provides peace of mind, knowing that the trust’s management will remain in capable hands throughout the beneficiary’s lifetime.
Hyden Zakheim, LLP
Frequently Asked Questions
Who is Eligible to Establish a Special Needs Trust?
Under special needs law, a family member can establish a special needs trust (a third-party special needs trust), or an individual (or a close family member) can create one with their own assets for themselves (a first-party trust). Eligibility requirements and terms vary and should be discussed with an attorney specializing in special needs trusts.
What are the Benefits of Establishing a Special Needs Trust?
Establishing a special needs trust can provide financial security for individuals with disabilities while ensuring their eligibility for government benefits. It also allows family members to contribute funds without jeopardizing the beneficiary’s access to essential support services. Consulting with a special needs trust attorney can help navigate the complexities and maximize the benefits of this crucial planning tool.
What if I want to designate my employer-provided life insurance or retirement benefits to a family member living with Special Needs?
Did you know that we frequently set up special needs trusts to have a mechanism to receive beneficiary-designated assets on behalf of a loved one living special needs? Uncles, aunts, grandparents, siblings, and other family members often approach us to ask what they can do to help support a special needs beneficiary in their family. The old misconception that you cannot leave assets to someone receiving public benefits is still untrue – you can make a powerful impact with these types of beneficiary-designated assets to improve the life of a person living with special needs or a disability.
What if I’d like to have a professional fiduciary, trust company, or bank serve as the trustee of a special needs trust and I’d like to keep other family members involved?
There are several ways to structure a special needs trust to lean on both family members and employ a professional fiduciary, trust company, or bank. The important role is to evaluate the strengths and challenges that any unique situation presents and rely on professional guidance to craft the best solution for your family, loved ones, and assets. There is not a one-size-fits-all solution, rather planning is a deeply personal exercise that relies on exploring the options and opportunities that exist. Our special needs estate planning attorneys have the experience and expertise to guide you through this process.
Contact Hyden Zakheim, LLP for a consultation providing guidance on Special Needs Trusts tailored to your unique circumstances.
