MT. DIABLO TRUST
Serving Northern California Since 1994
A "Special Needs" Trust is designed for the beneficiary of an individual with a disability. It is written so the beneficiary can enjoy the use of property that is held in the Trust for his or her benefit, while at the same time allowing the beneficiary to preserve government benefits and protect assets.
A Special Needs Trust is a completely discretionary (income and principal) Trust which is not subject to the "spend-down" rules for SDI or Medi-aid programs. This type of Trust must be very specific in order to qualify. Income not distributed can be added to principal (the default option) or can be distributed to other beneficiaries. The Special Needs Trust can be funded with the entire residue, a specific dollar amount or with a percentage of the Trust Estate. Options will be given for the distribution of the Trust at the death of the beneficiary (or if the beneficiary is not living at the death of the client).
In addition to the public benefits preservation reasons for such a Trust, there will be administrative advantages of using a Trust to hold and manage property intended for the benefit of the beneficiary if the beneficiary lacks the legal capacity to handle his or her own financial affairs. Special Needs Trusts are sometimes known as supplemental government benefits and protect assets.
A Special Needs Trust is a critical component to special needs planning, but it’s only one component of the plan for your family’s future.
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