When you have a loved one with a disability, you want to make sure they’re taken care of, no matter what the future holds. A third-party special needs trust is one way we help families in California do just that. This type of trust allows you to set aside funds for your loved one without affecting their eligibility for government benefits like Supplemental Security Income (SSI) or Medi-Cal.
Whether you’re a parent planning ahead or a grandparent hoping to leave a gift behind, this kind of trust can offer peace of mind. It gives you a way to support your loved one without creating financial complications down the line.
What Is a Third-Party Special Needs Trust?
A third-party special needs trust is created by someone other than the person with a disability, often a parent, grandparent, or sibling. It’s designed to hold assets that can be used to enhance the beneficiary’s quality of life, while still protecting their access to needs-based public benefits.
Unlike a first-party trust, which is funded with the beneficiary’s own money (such as a legal settlement), a third-party trust is funded with assets from others. You can create it during your lifetime or include it in your will. The trust can pay for things like personal care attendants, home furnishings, recreation, education, and other expenses that public benefits don’t cover.
Key Benefits of Setting Up a Third-Party SNT
There are several reasons why families choose to set up this kind of special needs trust:
- Preserves eligibility for government benefits like SSI and Medi-Cal
- Provides financial support without interfering with needs-based aid
- No payback to the state is required after the beneficiary’s passing
- Gives you control over how the funds are used
- Can include detailed instructions on what the funds should cover
With a third-party special needs trust, your gift is protected, and your loved one doesn’t have to worry about losing access to vital assistance.
Who Should Consider a Third-Party Special Needs Trust?
This type of trust can be a helpful planning tool for many families. You may want to consider it if:
- You have a child with a developmental disability or a chronic medical condition
- You’re a grandparent or relative who wants to leave an inheritance for a loved one with special needs
- You want to ensure that your financial support won’t put benefits at risk
- You’re preparing your estate plan and want to include long-term care for a family member
We understand how much thought and love goes into planning for someone who depends on you. That’s why we help you build something solid for the road ahead.
Choosing a Trustee and Structuring the Trust
When creating a third-party special needs trust, selecting the right trustee matters. This person will be responsible for managing the trust, making distributions, and ensuring that the beneficiary’s public benefits remain intact.
You can choose:
- A trusted family member or friend
- A professional fiduciary
- A corporate trustee, such as a trust company
- A co-trustee arrangement that blends personal and professional support
We’ll help you decide what setup works best for your situation. The trust terms can be flexible and customized, letting you decide how and when the funds can be used, what they should support, and who should step in if the trustee can no longer serve.
How We Can Help You Create a Third-Party SNT
At OC Wills & Trust Attorneys, we take the time to listen to your goals and answer your questions. We’ll walk you through each step of creating a third-party special needs trust, making sure your plan fits both your family and your finances.
We’ll help you build a trust that supports your loved one’s independence while staying within California’s public benefit rules. Our team knows how to tailor each trust to meet your needs while keeping everything clear, practical, and legally sound.
Contact Our Experienced Orange County Third-Party Special Needs Trusts Attorneys
You’ve worked hard to provide for your loved one. A third-party special needs trust is one way to keep supporting them, even after you’re gone. Let’s put a plan in place that gives you confidence and gives them security. Contact OC Wills & Trust Attorneys today to schedule your consultation.
