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Special Needs Trusts

Special Needs Trusts Under California Law

Special Needs TrustsThe following article will cover:

  1. Special needs trusts and who they are intended for.
  2. The importance of estate planning for parents with minor children and designating a guardian.
  3. Reviewing and updating estate planning documents over time.

What Exactly Is A Special Needs Trust Under California Law? Who Is It Intended For?

A special needs trust is a type of trust designed to provide financial support for individuals with disabilities or special needs, ensuring that their funds are managed appropriately. It can be included as a sub-trust within a family revocable trust or as a standalone trust created by family members, such as grandparents, who want to start funding it while they are still alive.

For example, a family with an autistic child who cannot manage money may choose to create a special needs trust for their protection. This trust ensures that the child has access to the funds but does not receive them outright, and the funds continue to be managed on their behalf even when they become an adult.

A standalone special needs trust can be established by grandparents or other family members who want to start funding a trust for their grandchild with special needs during their lifetime. They can contribute to the trust and direct parts of their estate to continue funding it after they pass away.

What Happens If One Does Not Have Proper Estate Planning Documents In Place That Clearly Lay Out Who Will Care For Their Children In California After Their Death?

Having proper estate planning documents that designate a guardian for your children is essential. Unfortunately, many young parents with minor children overlook this aspect of estate planning.

If both parents pass away without specifying a guardian for their children, the court will decide who will care for them. Family members who are close to the children may petition the court for guardianship. For example, if the children are staying with their grandparents after their parents’ passing, the grandparents can hire an attorney to seek legal guardianship. The court then generally monitors the situation on an annual basis, ensuring that the children’s best interests are being met, including proper medical care, dental care, and education.

To avoid leaving such crucial decisions to the court, it is vital for parents with minor children, especially those facing high-risk situations or health issues, to create an estate plan that includes clear instructions regarding guardianship.

How Often Do I Need To Review My Estate Planning Documents? Can I Make Changes Or Updates At Any Time?

It is recommended that you review your estate planning documents every couple of years, as life circumstances change. Factors such as your children growing up, the passing of a trustee, or the dissolution of a marriage may necessitate updates to your estate plan. Many law firms check in with their clients every two years to remind them to review their documents.

In general, estate planning documents can be amended or even revoked during your lifetime, allowing you to make changes as needed. The exception is if you have created an irrevocable trust. By definition, an irrevocable trust cannot be amended or revoked once it has been established; it continues with the rules set at its formation.

To keep your estate plan current and aligned with your wishes, make sure to review and update your documents as your life circumstances change. For more information on Special Needs Trust Under California Law, an initial consultation is your next best step.

More Information:

Hudson Martin PC - Carmel, CA

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