Special Needs Trust Attorney in Newbury Park

Special Needs Trust Attorney in Newbury Park

A direct inheritance destroys government benefits. If your disabled child or other family member who receives SSI or Medi-Cal gets money directly from your estate, the inheritance counts as a resource and their benefits end. The special needs trust must be established and in place before any money arrives. Once benefits have been terminated, getting them back usually means a first-party trust with a Medi-Cal payback, which costs more and gives up the remainder.

I am an estate planning attorney serving Newbury Park and all of Ventura County. I do this work over Zoom or phone, and a mobile notary comes to you for the signing. Newbury Park is a family-oriented community with many households that include both aging parents and adult children with disabilities. These families need this planning done right. For the broader context, see estate planning in Newbury Park.

How the trust protects benefits

A third-party special needs trust is designed to supplement, not replace, government benefits. It holds assets for the disabled person’s benefit and allows the trustee to pay for things that SSI and Medi-Cal do not cover: transportation, technology, education, recreation, and other quality-of-life expenses. The trust document is specifically drafted to avoid the trust assets being counted as the beneficiary’s resource. This requires precise language and it requires the trustee to understand the distribution rules, because a wrong distribution, particularly cash or payments for shelter, can reduce benefits for the month in which the distribution occurred.

I regularly draft these trusts for Newbury Park families where a grandparent, aunt, or uncle also wants to leave money to a disabled family member and does not realize their own estate plan needs to route through the same special needs trust rather than naming the disabled beneficiary directly. A well-drafted trust anticipates this and gives other family members clear instructions, and a letter of intent alongside the trust document, describing the beneficiary’s routines, preferences, medical providers, and daily needs, helps whoever eventually serves as trustee actually do the job well rather than just technically comply with the trust’s terms.

Setting it up before it is needed

The trust needs to exist before any inheritance arrives at the beneficiary. For a Newbury Park family that includes a disabled adult, the living trust for the parents should reference the special needs sub-trust or standalone SNT as the destination for any assets that would otherwise go directly to the disabled person. If you update your will or trust to leave money to a disabled person and you have not set up the SNT first, you have undone their benefits planning without intending to. I review the full plan, including how the special needs trust connects to the conservatorship alternative if that is also a concern, and how it fits with the living trust that holds the rest of the family’s assets.

I also ask Newbury Park parents to think past their own lifetime to who supervises the trust after they are gone. Naming a sibling as successor trustee is common, but that sibling needs to know, well before the parent dies, what the role actually requires and how the distribution rules work. A short planning conversation now, while the parents are still available to explain the beneficiary’s needs and preferences, saves the successor trustee from guessing later.

The federal and state law behind SNT planning

A first-party special needs trust, sometimes called a “(d)(4)(A) trust” after its federal citation at 42 U.S.C. §1396p(d)(4)(A), holds assets that belong to the disabled person themselves, often from a settlement, an inheritance received before planning was in place, or accumulated savings. It has to include a Medicaid payback provision, meaning that when the beneficiary dies, remaining trust assets first reimburse the state for Medi-Cal benefits paid during their lifetime. A third-party special needs trust, funded with a parent’s or other family member’s assets, has no such payback requirement, which is why I generally recommend setting one up in advance rather than relying on a first-party trust after the fact. When a court orders a minor’s or disabled person’s money, such as a settlement or judgment, paid to a special needs trust, Cal. Prob. Code §3604 governs the court’s approval, adding a layer of oversight that a trust for a competent adult beneficiary does not have. And for smaller amounts, 26 U.S.C. § 529A authorizes ABLE accounts, tax-advantaged savings accounts for disabled individuals that can hold funds without affecting SSI eligibility, complementing rather than replacing a special needs trust. The reason all of this matters is the underlying SSI resource limit: $2,000 for an individual and $3,000 for a couple. Anything over that, held directly by the beneficiary, threatens eligibility.

	Third-party trust	First-party trust
Whose money	A parent’s or other family member’s assets	The disabled person’s own assets: a settlement, an inheritance received before planning was in place, or accumulated savings
Payback at death	None	Remaining assets first reimburse the state for Medi-Cal benefits paid during the beneficiary’s lifetime
Court involvement	Most family-funded trusts don’t need a judge	Prob. Code § 3604 applies when a court orders a minor’s or disabled person’s money, such as a settlement or judgment, paid into the trust

The probate bill that lands before the trust is funded

A special needs trust can only spend what it receives. When a parent’s home is in their own name at death, probate comes first. On the Zillow Home Value Index for August 2026, the typical home in the Newbury Park neighborhood of Thousand Oaks is worth $1,011,176, and the fee schedule in Prob. Code §§ 10800 and 10810 allows the executor and the attorney each $23,112 on that value, or $46,224 together.

Slice of the estate	Rate	Fee for each of the executor and the attorney
First $100,000	4%	$4,000
Next $100,000	3%	$3,000
Next $800,000	2%	$16,000
Remaining $11,176	1%	$112
Total, each		$23,112

The schedule is figured on gross value with no deduction for a mortgage (§ 10810(b)), and the table assumes an estate of only the home. The schedule allows those amounts, and families don’t always pay them. The amount comes out of what would have funded the beneficiary’s trust. Putting the home in a living trust that holds the special needs sub-trust avoids the step. The probate calculator runs your numbers.

Retirement accounts and the disabled-beneficiary rule

For many Newbury Park households, the largest asset headed to a disabled child is a 401(k) or IRA, and the tax rules for it are separate from the benefits rules. Most beneficiaries of a defined contribution plan must take the whole account within 10 years of the owner’s death (26 U.S.C. § 401(a)(9)(H)(i)). The exception applies to an eligible designated beneficiary, and that category includes a beneficiary who is disabled within the meaning of § 72(m)(7) (§ 401(a)(9)(E)(ii)(III), (H)(ii)). The statute uses its own tax definition of disabled, so I check that separately from whether your child receives SSI or Medi-Cal.

A trust can qualify too. Section 401(a)(9)(H)(iv) and (v) address an “applicable multi-beneficiary trust”: a trust with more than one beneficiary, all treated as designated beneficiaries, and at least one who is a disabled or chronically ill eligible designated beneficiary. If the trust divides into separate trusts at the owner’s death, or no one else has any right to the account until the disabled beneficiary dies, the disabled beneficiary’s share can use the longer payout period. Section 401(a)(9)(H)(vi) extends the rule to other eligible retirement plans.

The practical steps are two: the beneficiary form has to name the trust, and the trust has to be drafted to fit those tests. A form that still names the disabled child directly ends benefits when the money arrives. The beneficiary designation audit and the inherited IRA ten-year rule cover the tax side.

If settlement money is headed to the trust: the court’s role in Oxnard

Most family-funded trusts don’t need a judge. Court approval comes in when a court orders money for a minor or a person with a disability, such as a settlement or judgment, paid into a special needs trust. Prob. Code § 3604(a)(1) requires the court to review and approve the trust’s terms, and the trust stays under the court’s continuing jurisdiction.

If the money could have been directed to a special needs trust but nobody asked, a parent, guardian, conservator, or other interested person can petition afterward, with notice given at least 15 days before the hearing (§ 3604(a)(2)). The court also has to find that the beneficiary has a disability that substantially impairs their ability to provide for their own care and is a substantial handicap, and that the beneficiary is likely to have special needs the trust will meet (§ 3604(b)(1) and (2)).

In Ventura County, probate and guardianship matters are heard at the Juvenile Justice Center, 4353 E. Vineyard Ave. in Oxnard. When the money comes from a lawsuit, which department handles the order depends on the case, and I check before filing. Personal injury lawyers on the underlying case handle the claim itself; I handle the trust that receives the money.

Questions Newbury Park clients ask

My disabled child already has some money. Is it too late for a special needs trust?

Not necessarily. A first-party special needs trust funded with the disabled person’s own money is an option, though it requires a payback provision for Medi-Cal and has different rules than a third-party trust. The question is whether a first-party trust makes sense for your situation, and how much money is already in the beneficiary’s name versus what is coming from a future inheritance we can still route around them.

Who should be the trustee?

Someone who understands the benefit rules and who will actively manage the trust, not just hold the assets. A sibling is common but needs to understand the responsibility. A professional trustee or pooled trust managed by a nonprofit is sometimes the better answer for long-term administration.

Can the trust pay for anything the disabled person wants?

No. The distribution rules have to be followed. Cash distributions and payments for shelter can reduce benefits. Other expenses are generally fine. The trustee needs to know the rules before making any distribution.

What is an ABLE account and do we need one in addition to the trust?

An ABLE account, authorized under 26 U.S.C. § 529A, is a tax-advantaged savings account for a disabled individual that can hold funds without counting against the SSI resource limit, up to statutory limits. It is a useful complement for smaller amounts and everyday spending flexibility, but it is not a substitute for a properly drafted special needs trust when larger sums, like an inheritance, are involved.

Does a special needs trust for my minor child need court approval?

Sometimes. Cal. Prob. Code §3604 applies when a court orders a minor’s money, such as a settlement or judgment, paid to a special needs trust, which adds a layer of oversight and periodic accounting that a trust for a competent adult typically does not require. I handle that court process as part of setting up the trust.

Can a special needs trust be the beneficiary of my 401(k)?

Yes, and for a disabled child it’s often the right choice. The trust has to be drafted to meet the tax rules for a multi-beneficiary trust in 26 U.S.C. § 401(a)(9)(H)(iv) and (v), and the plan’s beneficiary form has to name the trust. A form that names your child directly can end SSI and Medi-Cal eligibility.

Do I need a court order to set up a special needs trust for my child?

Not for a trust you fund from your own estate. Court review under Prob. Code § 3604 applies when a court orders a minor’s or disabled person’s money, such as a settlement, paid to a special needs trust. A private third-party trust created in a living trust or will follows its own terms.

Does the ten-year rule for inherited retirement accounts apply to a disabled beneficiary?

The ten-year rule is the default for most beneficiaries. A beneficiary who is disabled within the meaning of 26 U.S.C. § 72(m)(7) is an eligible designated beneficiary, and the longer payout rule in § 401(a)(9)(B)(iii) applies to that category (§ 401(a)(9)(H)(ii)). Whether a specific beneficiary meets the tax definition is a question I check before the plan is signed.