Medi-Cal Planning: Special Needs Trusts

In last month’s blog entry we gave an overview of Medi-Cal planning and the factors one should consider when planning for Medi-Cal benefits. In this month’s blog entry we’ll cover Special Needs Trusts and how they can benefit a Medi-Cal recipient.

If the intended beneficiary of a trust is receiving Medi-Cal, SSI, or other governmental benefits, great care must be taken to structure the gift to the beneficiary in such a way that it does not disqualify the beneficiary from receiving continued assistance. Special Needs Trusts, which are sometimes called a “supplemental needs trust”, are trusts that are drafted carefully to ensure that a disabled beneficiary continues to be eligible for government benefits. In a Special Needs Trust, distributions from the trust are designed only to supplement, not supplant or replace, the benefits being received under the trust.

Special Needs Trusts require careful drafting. Distributions must be purely discretionary, with no obligation on the trustee to make mandatory payments to the beneficiary. Special Needs Trusts are often used to protect beneficiaries with permanent disabilities, such as Down’s syndrome, severe autism, or cerebral palsy. These trusts may also be used to shield funds recovered from personal injury litigation or workers’ compensation injuries from disqualifying the beneficiary from receiving Medi-Cal benefits.

The laws concerning Medi-Cal benefits are constantly changing, and it is important to seek the advice of an experienced elder law and estate planning attorney who is readily familiar with any developments in this area of law.

Thanks for reading our blog. If you have questions regarding Special Needs Trusts or would like to learn more about the advantages offered by this type of trust, contact the Casiano Law Firm.