Special Needs Trust Attorney in Camarillo

Special Needs Trust Attorney in Camarillo

The problem is not that families fail to provide for a disabled child. It is that they provide in the way that does the most damage. A grandparent names the grandchild directly as beneficiary on a life insurance policy, or a will leaves an equal share outright to each child, and the disabled child’s inheritance immediately makes them ineligible for the benefits that pay for their care and their housing.

I am an estate planning attorney serving Camarillo and all of Ventura County. I draft special needs trusts and I coordinate them with the rest of the family’s plan, including the relatives whose beneficiary designations can undo everything. For the broader plan, see estate planning in Camarillo.

Why an outright inheritance causes harm

Supplemental Security Income and Medi-Cal are needs-based. Eligibility depends on countable resources staying under a limit, and an inheritance received outright is a countable resource. A disabled adult receiving SSI who inherits $60,000 outright is generally off benefits until that money is spent, and losing SSI can mean losing the Medi-Cal coverage that comes with it.

That coverage is often the thing paying for services no private policy replaces, including in-home supportive services and long-term care. Trading it for a lump sum that will be gone in two years is a bad trade, and it is entirely avoidable.

California’s Medi-Cal asset test returned on January 1, 2026, under AB 116, at $130,000 for an individual and $195,000 for a couple. The period during which the asset test was suspended is over, which makes this planning relevant again for families who were told a few years ago that it no longer mattered.

Third-party trusts, which is what most Camarillo families need

A third-party special needs trust is funded with someone else’s money, typically the parents’ or grandparents’. Because the beneficiary never owned the assets, there is no Medi-Cal payback at death. Whatever remains passes to whoever you name, usually the disabled beneficiary’s siblings.

This trust can be created now and funded later, or it can be created inside your living trust and come into existence at your death. Either way, the critical step is redirecting everything intended for that child into the trust rather than to the child. That means the will, the living trust, the life insurance beneficiary designation, and the retirement account designation all have to point at the trust.

It also means talking to the grandparents. A single well-meaning grandparent naming the child directly on a policy can undo an otherwise careful plan, and that is the most common failure I see in practice.

First-party trusts, for money the beneficiary already has

When the disabled person already owns the assets, from a personal injury settlement, an inheritance received outright, or accumulated savings, the tool is a first-party special needs trust under 42 U.S.C. §1396p(d)(4)(A). It must be established before the beneficiary turns sixty-five, and at their death the state must be reimbursed from what remains for Medi-Cal benefits paid.

That payback requirement is why a third-party trust is always preferable when there is a choice. Families who receive a settlement, or who discover that an inheritance already landed in the disabled person’s name, are past the point of choosing, and the first-party trust preserves eligibility going forward even with the payback.

A pooled trust under (d)(4)(C), administered by a nonprofit, is a reasonable alternative for smaller amounts where a standalone trust is not economical.

What the trust can pay for

The trustee makes distributions that supplement rather than replace what benefits provide. Education, therapies and equipment not covered by Medi-Cal, travel, a computer, recreation, a vehicle, and personal care attendants are typical. Direct cash to the beneficiary is not, and distributions for food and shelter can reduce the SSI payment, so a trustee needs to understand the rules before writing checks.

ABLE accounts complement the trust for smaller amounts. A person whose disability began before age twenty-six can hold an ABLE account, and balances up to $100,000 are disregarded for SSI. It gives the beneficiary direct control over modest funds without the trustee involvement a trust requires.

Choosing the trustee matters as much as the drafting. This trust may run for decades. A sibling who understands the beneficiary but not the benefit rules, paired with a professional co-trustee or a competent administrator, is often the right structure. See special needs trust administration.

Questions Camarillo clients ask

Will an inheritance disqualify my disabled child from SSI or Medi-Cal? If it goes to them outright, generally yes, until it is spent down. Directing it into a properly drafted special needs trust instead preserves eligibility while still providing for them.

What is the difference between a third-party and a first-party trust? A third-party trust is funded with someone else’s money, usually a parent’s, and has no Medi-Cal payback at death. A first-party trust is funded with the beneficiary’s own money, must be established before age sixty-five, and requires the state be reimbursed at death.

What is the Medi-Cal asset limit in California now? The asset test returned on January 1, 2026 under AB 116, at $130,000 for an individual and $195,000 for a couple. The suspension of the asset test that applied in prior years has ended.

Can the trust pay my child’s rent? It can, but distributions for food and shelter are treated as in-kind support and can reduce the SSI benefit. A trustee should understand that tradeoff before making housing payments, since sometimes the reduction is worth accepting and sometimes it is not.

What about grandparents who want to leave something? They need to leave it to the trust, not to the child. A direct beneficiary designation by a grandparent is the single most common way an otherwise sound plan gets undone. It is worth a conversation with every relative likely to name the child.

Do we still need a trust if we set up an ABLE account? Usually yes. ABLE accounts have annual contribution limits and a balance threshold above which SSI is affected, so they work well for modest amounts and day-to-day control. A special needs trust handles the larger inheritance an ABLE account cannot.

Book a consultation at https://ridley.click/eric-60 or call 805-244-5291. I serve Camarillo and all of Ventura County. For the full picture, see the California special needs trust guide.