Trust

The estate planning attorneys at Farhat Law Firm can give you the expert advice that you need to create a special needs trust for yourself or a loved one. We know the state and federal guidelines on eligibility for benefits, and we will make sure that your trust complies with those requirements. We also can discuss other aspects of estate planning that may be affected by the creation of the trust, such as inclusion in the estate for tax purposes or liability suits.

Revocable And Irrevocable Special Needs Trusts

The use of a special needs trust may be necessary in a situation where a disabled person is seeking state or federal benefits, and wants to shelter assets in order to be eligible. Those benefits can include Supplemental Security income as well as medical benefits. This can be useful where the disabled person may have other assets, such as judgment awards or inheritances that would make them otherwise ineligible for benefits. The amounts placed in trust may still be used, but only for certain categories of expenditures.

Irrevocable Special Needs Trust

Trust

In general, a special needs trust must be irrevocable to be valid. In other words, it cannot be changed or revoked except in special circumstances, and the assets placed in the trust cannot be removed. The first-party trust is when the disabled person creates a trust from their own assets. The third-party trust is established by another using their own assets for the benefit of the disabled. This is the more common type and the trust assets can be used for items such as:

  • Furniture and household goods
  • Computer equipment
  • Professional fees
  • Transportation and vacations
  • Luxury items.

The beneficiary does not have direct access to the fund, and the trustee is responsible for abiding to the trust requirements to maintain benefit eligibility.

Revocable Special Needs Trust

This type of trust has the same purpose as an irrevocable trust, but the difference is that assets may be added to or subtracted from the trust at any time. This is an advantage in a third party trust where the one who funded the trust may need assets for personal reasons. The drawback to a revocable trust is that it can be accessed by creditors as an asset, and it may affect some eligibility requirements.

Please contact us at at our Corona, California office by calling 800-391-9168 for a consultation with a lawyer on how drafting a trust may be in your financial interest.