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Better Special Needs Trusts

Special needs trusts are an important tool for protecting your loved ones with special needs.  What is generally available on the market is simply not good enough.  Because these trusts are so important, we provide them at no additional cost with all of our estate planning services. 

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Why a Special Needs Trust Can be a Great Thing

  • Why is this a big deal?  For people with special needs who are receiving government benefits, if they receive an inheritance outside of a special needs trust, that inheritance will often result in that person no longer qualifying for benefits and this could compromise their access to housing, medical treatment, and food.  

  • How do we fix it?  Special needs trusts are an estate planning tool that allows a family member to leave money to a person with a disability without disqualifying that person from receiving government benefits.   That way the person with a disability can benefit from both money and public benefits.  

For example, if you leave your child $100,000 directly, with no special needs trust, and they are receiving Medi-Cal or other benefits, they will often get kicked off their benefit programs until the $100,000 has been spent (usually on uncovered medical bills).  The child must then reapply for government benefits.  During that time they may not be able to see their regular doctor.  The $100,000 is gone and the whole process was disruptive to the child’s medical treatment.


With a special needs trust, the same $100,000 is held in trust and can be used for uncovered medical expenses, education, clothes, gifts, improved housing, and other life necessities, without causing a lapse in government benefits.   That way the child gets to keep their benefits and the $100,000.

When Special Needs Trusts are Not So Great

  • It might be an expensive waste of time if your child gets better. For clients who have very young children with autism, ADHD, seizure disorders, or other unpredictable conditions, it can be difficult to predict how that child will be doing in the future.   Special needs trust can be complicated to administer, expensive to establish, and restrict the beneficiary’s access to money.    If your child ends up not needing to preserve benefits, this can feel like an expensive waste of time.

  • Your child might need other forms of financial management: help  If your beneficiary ends up not needing public benefits, most special needs trusts only allow for the funds to be distributed directly to the child.   While many children may at some point be able to hold a job or otherwise not need public benefits, that does not always mean they are ready to handle an entire inheritance on their own.  Giving them direct access to a full inheritance can be confusing, wasteful, and overwhelming.

Summerall Law’s Solution

We have a unique multi-tiered approach that solves the biggest problems in this type of planning:

  • If your child gets better, the special needs trust does not have to have any affect – your beneficiary can receive an inheritance the same as everyone else.

  • We always have the option for a financial management trust, which allows the trustee to manage funds on behalf of a beneficiary who did not need the special needs trust, but does need some financial oversight.

  • We do not charge extra for special needs trusts, so it is never a waste of money.  Our special needs trusts are included in our estate plans.   Many firms charge thousands of dollars for these tools ($2,000-$5,000).   We just couldn’t do it.  We want you to make the right choice for protecting your family and not have to weigh in how it impacts your estate planning fee.  

Case Example:

We had a couple who adopted five children who are all on the autism spectrum.     One parent is a minister, and one parent works in technology – so they have enough money to really help their kids out, but not so much that their kids will never have to work.   All of the children have different skills and abilities – some they expect to go to college and do well, some it is totally unclear, and others that are considered gravely disabled (unlikely to ever be in the workforce). 

We prepared one master plan, with a trustee who is a trusted and skilled family member who knows all the children well.   If both parents pass away, then that person will decide for each child whether the child is ready to receive their portion of in the inheritance and what form of distribution makes sense (direct distribution, financial management trust or special needs trust).  

The client does not have to pay any extra fees to add on the additional trusts.   Those are included in their standard estate planning fee (even if you are using insurance).  

If the parents had not done the plan, then when the second parent passed away, all of the children would have received their inheritances as an outright distribution as soon as they were 18, with no one to help or guide them.   Not only would some of their children lost their very much needed public benefits, but the funds might have been squandered, it could have been stolen from them, and they would have been left with no backup financial protection for the rest of their lives.   Everyone slept a lot better knowing the most trusted person in their lives would be enabled to continue the love, guidance, and planning that would best enable their children to lead their lives.  

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