Special Needs Trust Attorney in Hidden Hills

Special Needs Trust Attorney in Hidden Hills

High-net-worth families in Hidden Hills with a disabled family member face a planning challenge that requires precise coordination: the special needs trust must protect government benefits while also coordinating with an overall estate plan that may involve multiple trusts, irrevocable structures, business interests, and significant inherited wealth. A direct inheritance to a disabled beneficiary ends their benefits, since the SSI resource limit under 42 U.S.C. §1382b(e) and related rules is just $2,000 for an individual and $3,000 for a couple. The special needs trust must be in place and correctly structured before any assets reach the disabled person.

I am an estate planning attorney serving Hidden Hills and the surrounding area. I do this work over Zoom or phone and sign in person. Hidden Hills is in Los Angeles County, and any court proceedings go through the LA County Superior Court. For the full estate planning overview, see the Hidden Hills estate planning page.

Coordinating the special needs trust with a complex estate plan

In a Hidden Hills estate with irrevocable trusts, LLCs, business interests, and investment portfolios, the special needs trust needs to be designed to receive a potentially significant inheritance without disqualifying the disabled beneficiary’s government benefits. The trust’s design must address what distributions the trustee can and cannot make, how the trust assets are invested and managed, and what happens to the trust assets when the beneficiary dies. For a trust established by the parents or another third party, no Medicaid payback is required at the beneficiary’s death, unlike a first-party trust funded with the beneficiary’s own assets under 42 U.S.C. §1396p(d)(4)(A), where the state must be reimbursed from what remains. The amount potentially available for a Hidden Hills disabled beneficiary through a third-party SNT may be very large, which makes selecting the right trustee and the right investment manager critically important for long-term administration.

Professional trustees for large special needs trusts

At the level of inheritance a Hidden Hills disabled beneficiary might receive, a professional trustee or a combination of a family co-trustee and a professional co-trustee is usually the right answer. The trust may operate for decades and require ongoing investment management, benefit rule compliance, and coordination with service providers. A family member who makes wrong distributions, fails to follow the benefit rules, or makes poor investment decisions creates significant liability and can harm the beneficiary. Professional trustees who work in special needs trust administration provide the expertise that a family member trustee may lack. For the conservatorship alternative when a disabled adult lacks capacity, see conservatorship. A living trust for the grantors that coordinates with the SNT is the foundational structure.

Court supervision, ABLE accounts, and the benefit rules that shape the trust

Cal. Prob. Code §3604 authorizes and governs court-supervised special needs trusts for minors and for adults who lack capacity, setting out how the trust must be structured and reviewed when court involvement is part of the picture, distinct from a purely private third-party trust created by parents while the beneficiary is capable of managing personal decisions. Alongside the trust, 42 U.S.C. §1382b(e) authorizes ABLE accounts, tax-advantaged savings accounts for individuals with disabilities that can hold up to a set annual contribution limit without affecting SSI, and which work well as a complement to a special needs trust for smaller, more flexible day-to-day expenses the trustee does not need to administer directly. I look at both tools together when designing the plan, since neither one alone is usually the complete answer for a Hidden Hills family.

Questions Hidden Hills clients ask

My disabled child may inherit several million dollars through the estate plan. Can the special needs trust hold that much? Yes. There is no maximum on a third-party special needs trust. The larger the trust, the more important it is to have professional trustee management, a well-drafted investment policy, and careful attention to how distributions are made without affecting benefits.

What if my disabled child also has a conservator? A conservator manages the disabled person’s general affairs under court supervision. A special needs trust is a separate structure that holds assets for the beneficiary’s benefit. The conservator and the trustee may interact on matters affecting the disabled person, but they are separate roles with separate legal obligations. Both may be necessary in some situations.

Can the trust buy property in Hidden Hills for my disabled child to live in? Yes. A special needs trust can own real property for the beneficiary’s use. Housing owned by the trust and occupied by the beneficiary is treated differently from cash shelter payments under SSI rules. For a Hidden Hills property, the ongoing costs of the property, maintenance, and property taxes would need to be addressed in the trust’s financial planning.

What is the difference between the third-party trust you are describing and a first-party special needs trust? A third-party trust is funded with someone else’s assets, typically a parent’s, and requires no payback to the state at the beneficiary’s death. A first-party trust, funded with the disabled person’s own assets under 42 U.S.C. §1396p(d)(4)(A), for example a personal injury settlement, must reimburse Medi-Cal for benefits paid before anything passes to other beneficiaries. Most Hidden Hills estate planning uses the third-party structure since the funds originate with the parents.

Does an ABLE account replace the need for a special needs trust? No. ABLE accounts under 42 U.S.C. §1382b(e) are useful for smaller, flexible expenses but have annual contribution and total balance limits that make them unsuitable for holding a significant inheritance. For a Hidden Hills family, the special needs trust handles the bulk of the inheritance, and the ABLE account can supplement it for day-to-day flexibility.

Book a consultation at https://ridley.click/eric-60 or call 805-244-5291. I serve Hidden Hills and the surrounding area. See also conservatorship and living trust planning.