ThinkstockPhotos-139735116Special needs trusts are for those individuals who need to access government benefits such as Medi-Cal or SSI.

Assets put inside a special needs trust do not count as available resources for the purposes of determining eligibility since the trustee of the trust has complete determination and discretion over how, whether and when to distribute assets. The purpose of a special needs trust is to help enable an individual to still tap into government benefits while also helping the assets inside the trust to last longer.

There are two different types of special needs trusts in California. These are a first party SNT and a third party SNT. Federal law requires that a first party SNT be used only for the benefit of the special needs beneficiary and that any unused funds in the trust are paid back to Medi-Cal estate recovery. However, the same is not true of a third party SNT. These trusts are established by friends or family in advance to receive gifts made during the beneficiary’s lifetime or made at death.

Direct gifting to the special needs individual might otherwise lead to disqualification from state and federal benefits. Consulting with an experienced California estate planning attorney is strongly recommended if you need to put together a special needs trust.

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