Special Needs Trusts for Los Gatos Families

Start with the beneficiary’s current situation

Before choosing a trust, identify the benefits the beneficiary currently receives or may seek, and clarify who owns the funds being considered and how they would enter the trust. These details matter to the questions that need review; they do not, by themselves, determine eligibility.

Keep the discussion focused on the beneficiary’s actual circumstances. A trust designed around one source of funds or one benefit concern may not answer questions raised by another. SSI and Medicaid treatment are not interchangeable: an arrangement that is not counted for SSI may still affect Medicaid eligibility.

• List current benefits and any benefit applications or eligibility questions already under consideration.
• Describe the proposed funds: who owns them now, where they come from, and whether they would be transferred or contributed to the trust.
• Identify the intended beneficiary and the people involved in considering or managing the proposed arrangement.

Compare the proposed trust with the available alternatives

Ask whether the proposal is a special-needs trust, a pooled trust, or another type of arrangement, and what specific issue each option is intended to address. Certain special-needs and pooled trusts can qualify for exceptions in SSI trust treatment, but those exceptions have conditions. The label is not enough to show that the conditions are met.

A useful comparison is not simply “trust or no trust.” Consider the source and ownership of the funds, the beneficiary’s existing benefits, and which program’s treatment is being evaluated. If the proposal is meant to address more than one program, ask how each program will be considered separately. Do not assume an SSI-related exception resolves Medicaid eligibility.

• What benefit-related concern is the proposed arrangement intended to address?
• How does the proposal account for the ownership and source of the funds?
• Which conditions would need to be assessed for the proposed trust, and which benefit programs remain a separate question?

Understand what a trust cannot promise

A trust does not guarantee that an inheritance or other funds will preserve SSI, Medi-Cal, or another benefit. Trust assets and distributions can affect SSI eligibility, and exceptions for certain special-needs and pooled trusts have conditions. Separately, a trust not counted for SSI can still affect Medicaid eligibility.

The practical consequence is that deciding to create or use a trust is not the same as receiving a program-specific eligibility determination. Do not treat an intended benefit outcome as assured simply because funds would be placed in a trust. The relevant program’s treatment must be considered in light of the proposed arrangement and the beneficiary’s circumstances.

Prepare for a focused planning discussion

Bring a concise picture of the beneficiary’s benefits and the proposed funds. If the funds have not yet been received, explain their anticipated source and who currently owns them. If a trust document or proposal already exists, bring it so the discussion can address its terms rather than relying on a general description.

For a useful next step, ask for the questions that must be resolved before choosing among the proposed alternatives, including which benefit program is at issue and what further program-specific review may be needed. Codi M. Dada Law Office P.C. has one in-person office in Novato and provides virtual services statewide, including for people in Los Gatos.