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LAW OFFICE OF JAMES J. O'BRIEN                                    (415) 954-7131

Special situations call for a special kind of trust.  For persons with special needs, a Special Needs Trust (also known as a Supplemental Needs Trust) can be an essential planning instrument.  A Special Needs Trust can protect assets of a special needs person without forgoing the government benefits to which that person is entitled.

There are three types of Special Needs Trusts:

  1. Third Party - a trust funded by someone other than the special needs beneficiary of the Special Needs Trust;
  2. First Party (also known as a d-4-A or payback trust) - a trust funded by the special needs beneficiaries own assets, but created by the beneficiaries parent, grandparent, legal guardian or the court;
  3. Pooled Trust (also known as a d-4-C trust) - a trust run by a nonprofit organization set up to professionally administer numerous pooled special needs trusts on behalf of the beneficiaries.  Beneficiary assets are combined and invested together.  Funds are spent on beneficiaries in proportion to their share of the total amount of pooled assets.

Who Can Benefit From A Special Needs Trust

Special Needs Trusts can benefit persons of any age who have disabilities that may qualify them for Supplemental Social Security ("SSI") or Medicaid benefits.  For SSI, disability eligibility is determined by a complex set of criteria administered by the Social Security Administration.  Generally, the disability must be significant and expected to last more than 12 months.  Federal programs that provide assistance to adults with disabilities under the age of 65 often focus on whether someone has the ability to be gainfully employed.

Purpose of A Special Needs Trust

The primary purpose of a Special Needs Trust is to provide financial resources to enhance the quality of life of a special needs beneficiary without forfeiting that person's government assistance.  Trust funds can be used for, among other things:

  • caregiving (including therapies not paid for by Medicaid);
  • services (including cleaning, cell phone and internet);
  • personal property (including clothing, furniture, computers and training items); and
  • life experiences (including travel, activities and as an audience member).

It is critical to properly set up a Special Needs Trust.  An effective Special Needs Trust enhances the beneficiaries every day life activities while avoiding the loss of important government assistance and funding.  A improperly constructed Special Needs Trust can lead to the denial of critical government benefits.

For a free consultation contact Jim at:

Phone:  (415) 513-7942

Mobile:  (415) 513-7942

Fax:      (415) 523-9420