Special Needs Trust Attorney in Simi Valley

Special Needs Trust Attorney in Simi Valley

If a disabled family member receives an inheritance directly, without a special needs trust in place, their government benefits end. SSI, Medi-Cal, and SSDI are all means-tested to varying degrees, and a direct inheritance counts as a resource that disqualifies the recipient. The SSI resource limit is $2,000 for an individual and $3,000 for a couple, an amount that a single inheritance check can blow through instantly. The trust must exist before the money arrives. Once benefits are terminated by a disqualifying resource, restoring them takes time and may require a first-party trust with payback provisions. Doing it right upfront is always the better path.

I am an estate planning attorney serving Simi Valley and all of Ventura County. I do this work over Zoom or phone and sign in person. Simi Valley has many multi-generational families with caregiving situations, and the special needs trust planning I do for these families is some of the most important work in my practice. For the full planning context, see estate planning in Simi Valley.

Third-party trusts for Simi Valley families

A third-party special needs trust is established by a parent, grandparent, or other family member with their own assets for the benefit of the disabled person. It is designed to supplement government benefits, not replace them. The trust can pay for transportation, technology, recreation, education, personal care items, and other needs that SSI and Medi-Cal do not cover. The trustee manages distributions in a way that does not count as income or resources for benefit purposes. At the disabled beneficiary’s death, the remaining trust assets go to other family members or to a designated remainder beneficiary, with no payback to Medi-Cal. The absence of a payback requirement is the key advantage of a third-party trust over a first-party trust.

First-party trusts and the Medi-Cal payback requirement

A first-party special needs trust is different: it is funded with the disabled person’s own assets, most commonly a personal injury settlement, an inheritance received before a trust was in place, or back benefits. 42 U.S.C. §1396p(d)(4)(A) authorizes this type of trust specifically so that a disabled person under 65 can hold assets in trust without losing SSI or Medi-Cal eligibility, but it requires that any funds remaining in the trust at the beneficiary’s death first reimburse the state for Medi-Cal benefits paid during the beneficiary’s lifetime, before anything passes to other family members. This payback provision is a legal requirement, not optional drafting, and I make sure clients understand it going in. For a minor or a disabled person who cannot manage their own trust, Cal. Prob. Code §3604 requires court supervision of the trust, adding a layer of oversight that first-party trusts for minors in particular must satisfy.

ABLE accounts as a complementary tool

For smaller amounts, an ABLE account authorized under 42 U.S.C. §1382b(e) can complement a special needs trust rather than replace it. ABLE accounts let a disabled person save and invest up to certain annual and lifetime limits without those funds counting against the SSI resource limit, and the account can be used more flexibly and with less administrative overhead than a full trust for day-to-day expenses. For Simi Valley families managing a disabled family member’s finances, I often recommend an ABLE account alongside a special needs trust: the ABLE account handles small, frequent expenses, and the trust holds and manages the larger inheritance or settlement.

Integrating with the parents’ estate plan

For a Simi Valley family where one child has a disability and others do not, the parents’ living trust needs to coordinate with the special needs trust. The disabled child’s share should pour into the special needs trust, not go directly to the disabled child. The non-disabled children’s shares go directly to them. Getting this coordination right in the drafting stage prevents a crisis when the parents die. For families also dealing with the conservatorship question for an adult disabled child, see conservatorship and the broader incapacity planning overview. A living trust that references the special needs trust is the standard mechanism for handling this.

Coordinating with schools, care providers, and IHSS

For a lot of Simi Valley families, the special needs trust is only one piece of a much larger caregiving picture that includes school-based services, In-Home Supportive Services, and regional center funding through the Tri-Counties Regional Center. The trust needs to be drafted with an awareness of how these other systems work, since a trust that pays for something a regional center is already required to provide can create redundancy or confusion, while a trust that fails to cover a gap those systems do not fill can leave the family paying out of pocket unnecessarily. I ask about the full picture of services and supports a disabled family member is currently receiving or expected to need before drafting distribution provisions, so the trust supplements the existing system instead of duplicating or conflicting with it.

Questions Simi Valley clients ask

How do I find a trustee who understands the rules? A professional trustee who practices in special needs trust administration is an option. Nonprofit pooled trusts managed by disability advocacy organizations are another. A family member trustee who is willing to learn the rules and who will actually manage the trust actively can also work. I can help you think through the options based on your family’s situation.

Can the trust own the disabled person’s home? Yes, a special needs trust can own real estate for the beneficiary’s use. Housing owned by the trust and used by the beneficiary is treated differently from cash distributions for rent under SSI rules. This is an area where the rules are specific and getting professional guidance matters.

What if the disabled person receives a personal injury settlement? A settlement that goes directly to a disabled SSI recipient is a resource that will end their benefits. A first-party special needs trust established under 42 U.S.C. §1396p(d)(4)(A) with settlement funds, with court approval, can protect benefits while still allowing the disabled person to benefit from the settlement. This requires immediate legal action after a settlement is reached.

Does a special needs trust for my minor child need court approval? Often yes. Cal. Prob. Code §3604 requires court supervision for special needs trusts established for minors or for adults who lack capacity to manage their own affairs, which adds a layer of oversight and periodic reporting that the trustee must satisfy.

Is an ABLE account a substitute for a special needs trust? No, but it complements one. Under 42 U.S.C. §1382b(e), ABLE accounts allow smaller amounts to be saved without affecting benefits, but the contribution limits are far below what a trust can hold, so most families use both tools together rather than relying on either alone.

Book a consultation at https://ridley.click/eric-60 or call 805-244-5291. I serve Simi Valley and all of Ventura County.