What is a First Party Special Needs Trust?

Your San Jose estate planning attorney knows that losing your government disability benefits can be a scary reality for many. However, you should know that you have options! A first party special needs trust, also known as a self-settled special needs trust, is a trust that is established for the benefit of an individual with a disability using the individual’s own assets. This type of trust is typically used to supplement government benefits that the individual may be receiving, such as Supplemental Security Income (SSI) and Medicaid.

There are several advantages to establishing a first party special needs trust:

  1. Protects government benefits: If an individual with a disability has more than $130,000 in assets in their own name, they may no longer be eligible for certain government benefits, such as SSI and Medi-Cal. By transferring assets to a first party special needs trust, the individual can still receive these benefits while also having access to additional resources to meet their needs.
  2. Allows for greater control: With a first party special needs trust, the individual with a disability can specify how they want their assets to be used and who they want to manage the trust on their behalf. This can give the individual greater control over their finances and future planning.
  3. Provides for the individual’s future: A first party special needs trust can be set up to provide for the individual’s needs both now and in the future. This can include things like paying for medical expenses, housing, transportation, and other necessary expenses.
  4. Avoids probate: Assets held in a trust do not go through the probate process when the individual with a disability passes away. This can save time and money for the individual’s family, as well as ensure that the trust’s assets are distributed according to the individual’s wishes.

It’s worth noting that there are certain rules and restrictions that apply to first party special needs trusts. For example, the trust must be irrevocable, and the individual with a disability must be under the age of 65 when the trust is established. It’s important to consult with our qualified San Jose estate planning attorneys and a financial advisor to ensure that a first party special needs trust is appropriate for your situation and to ensure that the trust is set up correctly. To get started on yours today, call (800) 244-8814.

If you have any further questions about estate planning and strategies to shield your wealth, or if you’d like to have your current asset protection plan reviewed to make sure it still meets your needs, please contact us at one of our offices located throughout the state of California 800-244-8814 to set up a consultation.

Continue Reading

Upstream Planning
Protection and Flexibility in Trusts

Skip to content