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Setting up a special needs trust

Families in California with disabled loved ones may have questions about providing supplemental financial care for them. Those who are disabled may be receiving government benefits, but these benefits are designed to meet only essential needs. It is common for families to provide supplemental funds to make sure all needs are met. A special needs trust allows parents and other family members to contribute money for the benefit of a disabled loved one and ensures that the money is spent wisely on things such as medical care.

When setting up a trust such as this, a common question that arises is how much money is needed to adequately fund the trust. There is no minimum amount of money required in order to fund this type of trust. Obviously, the type of disability and type of care required will factor into the equation, but special needs trusts can range from tens of thousands to millions of dollars. However, $100,000 is the recommended amount, due to costs of setting up and maintaining the trust.

There are different types of special needs trusts. The most common type is a third-party trust. These are set up by families for the benefit of their children. An alternative to an individual special needs trust is a pooled-asset trust. This type of trust consists of multiple beneficiaries.

Regardless of the type, setting up a trust can be complex due to strict rules and regulations. Families in California can start the process of setting up a special needs trust by involving the entire family and conferring with family members to iron out specifics and details. Since the rules surrounding special needs trusts can get complicated, it may be beneficial to consult a legal representative. A knowledgeable attorney can provide legal guidance and assist families with initiating and maintaining a trust, along with any other estate plan related needs.

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The Law Office of Araceli Tovar, APC

251 Madrona St.
Chula Vista, CA 91910

Phone: 619-869-4200
Fax: 619-869-4202
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