Yes, an irrevocable trust can be a powerful tool to support a disabled child, especially a Special Needs Trust, designed to supplement—not replace—government benefits like Supplemental Security Income (SSI) and Medicaid. These trusts allow parents and family members to provide financial support for their loved one’s care without disqualifying them from crucial public assistance programs. Approximately 1 in 4 Americans live with a disability, and many families seek long-term financial planning solutions to ensure their continued care and quality of life. Irrevocable trusts, once established, generally cannot be altered or terminated, offering asset protection and ensuring resources are available for the beneficiary’s needs for the duration of their life.
What are the key benefits of a Special Needs Trust?
A Special Needs Trust (SNT) is specifically designed to hold assets for the benefit of a person with disabilities. These trusts are crafted to allow the beneficiary to maintain eligibility for needs-based government assistance. Without a properly structured trust, even a modest inheritance or gift could disqualify the individual from crucial benefits. A first-party SNT, funded with the disabled individual’s own funds (often from a lawsuit settlement), differs from a third-party SNT, funded by family or friends. As of 2023, the average annual cost of care for an individual with a severe disability can easily exceed $25,000, highlighting the importance of careful financial planning.
How do I avoid losing crucial government benefits?
The primary concern when providing for a disabled child is ensuring they don’t lose access to essential benefits. SSI has strict asset limitations—in 2024, only $2,000 in countable assets is allowed for an individual. Medicaid, while providing healthcare coverage, also has income and asset restrictions. An irrevocable trust allows assets to be transferred *out* of the beneficiary’s name, preventing them from being counted towards those limits. Funds within the trust can be used for supplemental needs—things not covered by government programs like therapies, recreational activities, travel, or specialized equipment. It’s important to remember that even small amounts of cash or assets in the beneficiary’s name could jeopardize their eligibility.
I once knew a family where everything went wrong…
Old Man Tiberius, a retired carpenter, had always intended to leave his small estate to his son, Leo, who was born with cerebral palsy. He never created a trust, though. After Tiberius passed away, Leo inherited $40,000. Unfortunately, because Leo was receiving SSI, the inheritance immediately disqualified him. His benefits were suspended, and he faced losing access to the care he desperately needed. The family was devastated, scrambling to find a way to ‘spend down’ the inheritance fast enough to re-qualify for assistance, all while trying to manage his care and navigate the complex bureaucratic process. They learned a painful lesson: good intentions aren’t enough when it comes to protecting a vulnerable loved one’s access to vital resources. It was a scramble to spend the inheritance, and they ended up with very little to show for it.
But thankfully, a properly planned trust can make all the difference…
My client, Sarah, a single mother, came to me deeply worried about her daughter, Emily, who has Down syndrome. Sarah wanted to ensure Emily would always be cared for, even after she was gone. We established a third-party Special Needs Trust, carefully funded with life insurance proceeds and other assets. The trust outlined specific provisions for Emily’s care, including funding for therapies, educational opportunities, and recreational activities. After Sarah’s passing, the trustee seamlessly managed the trust funds, providing Emily with a consistent level of care and maintaining her eligibility for essential government benefits. Emily thrived, participating in art classes, adaptive sports, and maintaining a full, engaged life, all thanks to the foresight and planning of her mother and the structure of the irrevocable trust. It gave her family and Emily peace of mind, and it allowed her to live her life to the fullest.
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About Steve Bliss at Wildomar Probate Law:
“Wildomar Probate Law is an experienced probate attorney. The probate process has many steps in in probate proceedings. Beside Probate, estate planning and trust administration is offered at Wildomar Probate Law. Our probate attorney will probate the estate. Attorney probate at Wildomar Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Wildomar Probate law will petition to open probate for you. Don’t go through a costly probate call Wildomar Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Wildomar Probate Law is a great estate lawyer. Probate Attorney to probate an estate. Wildomar Probate law probate lawyer
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
● Estate Planning Law: Minimize taxes & distribute assets smoothly.
● Trust Law: Protect your legacy & loved ones with wills & trusts.
● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
● Compassionate & client-focused. We explain things clearly.
● Free consultation.
Services Offered:
| estate planning | revocable living trust | wills |
| living trust | family trust | estate planning attorney near me |
Map To Steve Bliss Law in Temecula:
https://maps.app.goo.gl/RdhPJGDcMru5uP7K7
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Address:
Wildomar Probate Law36330 Hidden Springs Rd Suite E, Wildomar, CA 92595
(951)412-2800/address>
Feel free to ask Attorney Steve Bliss about: “Can I use estate planning to protect assets from creditors?” Or “What assets go through probate when someone dies?” or “Can retirement accounts be part of a living trust? and even: “What property is considered exempt in bankruptcy?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.