Provide for your child without ending their benefits.

A special needs trust is a trust drafted to specific federal and California rules so that assets inside the trust are not counted as the beneficiary’s assets for Medi-Cal or SSI eligibility. The beneficiary still benefits from the trust (the trustee can pay for supplemental needs the public benefits do not cover), but does not own the assets for eligibility purposes. Without the trust, even a modest inheritance can disqualify a person with a disability from the benefits they depend on.

A third-party special needs trust is funded with someone else’s assets, typically a parent or grandparent. There is no payback to the state at the beneficiary’s death; remaining assets pass to other family members named in the trust. A first-party (self-settled) special needs trust is funded with the beneficiary’s own assets, typically from a personal injury settlement or an inheritance received in their own name. First-party trusts must include a payback provision: when the beneficiary dies, the state is reimbursed for Medi-Cal benefits paid before any remainder passes to other beneficiaries. The federal authority is 42 U.S.C. § 1396p(d)(4)(A).

Yes, in most cases, unless the inheritance is directed into a properly drafted special needs trust. Once the 2026 Medi-Cal asset limit reinstatement takes effect, even a small inheritance held in the beneficiary’s own name can push them above the limit and end coverage. SSI also has its own asset and income tests. Routing the inheritance through a third-party special needs trust avoids both problems if the structure is in place before the inheritance arrives.

No, but they often work together. A CalABLE account is a tax-advantaged savings account a person with a disability can hold in their own name without losing means-tested benefits, up to a federal contribution cap (currently $19,000 per year, indexed). A special needs trust has no annual contribution limit, can hold any kind of asset (real property, investments, business interests), and is administered by a trustee. Most California families with a special needs child use both: the SNT for the larger inheritance or settlement, the ABLE account for everyday savings the beneficiary can manage themselves.

A family member, a professional fiduciary, a trust company, or a pooled trust administrator. The trustee has to understand the distribution rules. A distribution that pays directly to the beneficiary (or that pays for food or shelter without following SSI’s in-kind support and maintenance rules) can reduce or eliminate benefits. Many California families name a parent as initial trustee and a professional as successor, so the trust does not depend on the family forever.

For a third-party trust, before any inheritance or gift is made. The trust receives the assets directly; once the assets land in the beneficiary’s name, recovering them is much harder. For a first-party trust, before the beneficiary’s 65th birthday (federal law restricts first-party SNTs to beneficiaries under 65 at the time the trust is funded). For a beneficiary already on Medi-Cal who is about to receive a settlement, the timing is urgent because the asset limit kicks in immediately when the funds arrive.

Yes, but with care. Direct payments for rent, mortgage, property taxes, or utilities count as in-kind support and maintenance under SSI rules and can reduce SSI by up to one-third (the Presumed Maximum Value reduction). Some families accept the reduction because the housing benefit is still worth more than the lost SSI. Others structure distributions to pay for non-housing items only. The right approach depends on the beneficiary’s benefit mix and what the family wants the trust to do. Bob walks through this decision with every special needs trust client.

California eliminated the Medi-Cal asset test on January 1, 2024. In 2026, the state is reinstating an asset limit. Families who relied on the elimination to leave assets in the beneficiary’s name will need to move those assets into a properly drafted special needs trust before the limit takes effect, or risk losing coverage. The Law Offices of Robert P. Bergman has a separate guide on the 2026 change. Read it on the blog: https://lawbob.com/blog/medi-cal-asset-limit-reinstated-2026

A standalone third-party special needs trust drafted by Bob is typically packaged with the parents’ full estate plan (revocable trust, pour-over wills, powers of attorney, advance health care directives) and a coordinated beneficiary designation update on retirement accounts and life insurance. A first-party trust drafted in connection with a personal injury settlement is priced separately and depends on the complexity of the funding. Bob gives a written fee estimate at the Plan Design Meeting.

Maybe not, if the child is not on Medi-Cal or SSI now and is not expected to be in the future. But circumstances change. A mild disability can become a more limiting one. A job loss can mean enrollment in benefits. A future inheritance can land at a moment when the child is in a difficult period. Many families set up a third-party special needs trust as a safety net, fund it modestly, and never have it tested. The cost of having one and not needing it is small. The cost of needing one and not having it is total benefit loss.

Yes. Special needs trusts are governed by federal Social Security and Medicaid rules plus California state law, both of which apply uniformly across California counties. Bob drafts SNTs for families throughout California and coordinates remotely when needed. Plan Design Meetings happen by Zoom for clients outside the immediate area.