Special Needs Trust Planning for Portola Valley Families

Start with the beneficiary’s current benefits

Before choosing a trust, identify which benefits the person currently receives and which programs may matter in the future. SSI and Medicaid eligibility do not necessarily respond to a trust in the same way. Trust assets and distributions can affect SSI eligibility, and a trust that is not counted for SSI can still affect Medicaid eligibility.

This distinction is important when comparing possible arrangements. A conclusion about SSI should not be treated as a conclusion about Medicaid, or about every other benefit the person may receive. The effect depends on the program and the circumstances, so a trust should not be presented as a guarantee that benefits will continue unchanged.

• List the benefits the person receives now and any program-specific questions that need an answer.
• Separate questions about whether trust assets count from questions about how distributions may affect eligibility.

Compare the proposed trust with the source of funds

The proposed trust should be considered alongside the assets intended to fund it. For each expected contribution, be ready to explain who owns the asset now, where it comes from, and whether it is already held in a trust or another arrangement. Those are practical questions to discuss; the answers alone do not establish benefit eligibility.

This comparison helps frame the planning conversation: does the proposed arrangement address the beneficiary’s actual benefits and anticipated funding, or does it leave program-specific questions unresolved? The available federal guidance recognizes exceptions for certain special-needs and pooled trusts, but conditions apply. The name given to a trust is not a substitute for assessing the applicable conditions and the separate effect on each relevant program.

• Gather a current summary of benefits and identify any pending eligibility or review questions.
• Prepare an asset list showing current ownership, expected source, and intended timing of any contribution.
• Bring existing trust documents or other records that describe how the assets are currently held.

Understand the alternatives and limits

The available information supports considering certain special-needs or pooled trust arrangements as possible exceptions, not assuming that either arrangement automatically protects benefits. Conditions apply, and a trust not counted for SSI may still affect Medicaid eligibility. A proposed trust therefore needs to be assessed against the beneficiary’s specific programs and the planned funding.

If the beneficiary’s program, ownership of the funds, or funding source is uncertain, treat that uncertainty as a decision point rather than assuming a trust will solve it. Before moving forward, clarify what additional program-specific information is needed and whether the proposed arrangement can be evaluated in light of that information. No trust can be represented as guaranteeing continued SSI, Medi-Cal, or other benefits.

Prepare for a focused planning discussion

A useful next step is to organize the benefit information, asset and funding details, and any existing trust records before discussing options. Then ask how the proposed trust and its anticipated distributions should be evaluated for each relevant program, what conditions may apply to a possible exception, and what remains uncertain. Keep those as separate questions rather than relying on a general statement that a trust preserves benefits.

Codi M. Dada Law Office P.C. offers virtual services statewide from its Novato office. A focused discussion can help identify the questions to resolve before choosing a trust structure or deciding how assets might be directed.