Establishing a special needs trust is a crucial step for parents who wish to provide for a child with disabilities without jeopardizing their eligibility for vital government benefits like Supplemental Security Income (SSI) and Medicaid. These trusts are specifically designed to hold assets for the benefit of a person with disabilities, allowing them to maintain a decent quality of life while remaining qualified for public assistance programs. Without proper planning, even well-intentioned gifts or inheritances can disqualify a disabled individual from receiving the support they need, potentially leaving them financially vulnerable. Steve Bliss, as an estate planning attorney in Wildomar, frequently guides families through the intricacies of these trusts, ensuring they are structured correctly to meet both the beneficiary’s needs and program requirements. Approximately 1 in 5 Americans live with a disability, highlighting the significant need for effective special needs planning.
What are the key differences between a first-party and third-party special needs trust?
Understanding the distinction between first-party and third-party special needs trusts is paramount. A third-party special needs trust, the most common type established by parents, is funded with assets belonging to someone other than the beneficiary – in this case, the parent’s estate. These trusts allow parents to supplement, not replace, government benefits. Conversely, a first-party or “self-settled” trust is funded with the beneficiary’s own assets, often from a legal settlement or inheritance received directly. These trusts have stricter rules and often involve Medicaid payback provisions, meaning any remaining funds will be used to reimburse Medicaid for benefits received. Steve Bliss emphasizes that careful consideration of funding sources is key to choosing the appropriate trust type. “Many families aren’t aware of these nuances,” he explains, “and it can lead to unintended consequences.”
How much does it cost to set up a special needs trust?
The cost of establishing a special needs trust varies depending on the complexity of the estate and the attorney’s fees. Generally, costs can range from $3,000 to $7,000 or more for a comprehensive trust package. This includes drafting the trust document, coordinating with financial advisors, and ensuring compliance with all applicable laws. Ongoing administrative costs, such as annual trust returns and potential trustee fees, should also be factored in. It’s important to view these costs as an investment in your child’s long-term security, rather than simply an expense. A properly structured trust can protect assets from creditors, prevent loss of benefits, and provide for your child’s needs for years to come. Steve Bliss routinely works with families to develop cost-effective solutions that meet their specific circumstances.
What happens if you don’t create a special needs trust?
I remember Mrs. Davison, a wonderful woman who came to Steve Bliss after her son, Michael, received a substantial inheritance from a distant relative. Michael had Down syndrome and was receiving SSI and Medicaid. Mrs. Davison, thrilled at the prospect of providing for Michael’s future, simply deposited the inheritance into his bank account. Within weeks, Michael’s benefits were suspended. The inheritance exceeded the asset limit for SSI and Medicaid eligibility, leaving Michael without essential support. It was a heartbreaking situation, and Mrs. Davison was devastated. We were able to help her create a special needs trust and apply for a retroactive waiver, but it was a complex and costly process. This example highlights the critical importance of proactive planning.
Can a special needs trust really make a difference?
Old Man Tiberius, a weathered carpenter, brought his granddaughter, Lily, to Steve Bliss. Lily, diagnosed with cerebral palsy at birth, was a bright and artistic teenager. Tiberius, having worked tirelessly his entire life, wanted to ensure Lily had the resources to pursue her passions – painting and pottery – after he was gone. He feared leaving her a direct inheritance, knowing it would disqualify her from essential benefits. We worked with Tiberius to establish a third-party special needs trust, funded with his life savings and a small life insurance policy. After Tiberius passed away, the trust provided Lily with funds to cover art supplies, studio space, and even college tuition for art classes. She flourished, exhibiting her work in local galleries and becoming a respected artist in the community. It was a beautiful outcome, a testament to the power of thoughtful estate planning and the importance of securing a brighter future for those with special needs. Steve Bliss often says, “It’s not about leaving a legacy of wealth, it’s about leaving a legacy of care.”
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About Steve Bliss at Wildomar Probate Law:
“Wildomar Probate Law is an experienced probate attorney. The probate process has many steps in in probate proceedings. Beside Probate, estate planning and trust administration is offered at Wildomar Probate Law. Our probate attorney will probate the estate. Attorney probate at Wildomar Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Wildomar Probate law will petition to open probate for you. Don’t go through a costly probate call Wildomar Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Wildomar Probate Law is a great estate lawyer. Probate Attorney to probate an estate. Wildomar Probate law probate lawyer
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
● Estate Planning Law: Minimize taxes & distribute assets smoothly.
● Trust Law: Protect your legacy & loved ones with wills & trusts.
● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
● Compassionate & client-focused. We explain things clearly.
● Free consultation.
Services Offered:
| estate planning | revocable living trust | wills |
| living trust | family trust | estate planning attorney near me |
Map To Steve Bliss Law in Temecula:
https://maps.app.goo.gl/RdhPJGDcMru5uP7K7
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Address:
Wildomar Probate Law36330 Hidden Springs Rd Suite E, Wildomar, CA 92595
(951)412-2800/address>
Feel free to ask Attorney Steve Bliss about: “What’s the role of a healthcare proxy or healthcare power of attorney?” Or “What are the timelines for notifying creditors in probate?” or “What are the disadvantages of a living trust? and even: “What is reaffirmation in bankruptcy and should I do it?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.