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How to set up a special needs trust

On Behalf of | Jun 12, 2022 | Trusts |

The love and support you show for a disabled loved one in California doesn’t have to end when you pass. You can set up a special needs trust in order to provide for them even after you are gone. There are a certain number of rules and regulations that will have to be followed in order to set up this trust.

The two types of special needs trusts

There are two main types of special needs trusts that you can set up in California. The first is known as a stand-alone trust. You can use it to financially support your loved one along with contributions from others. This arrangement is not part of an official will or standard trust. The money you place in it can be accessed before your death.

The other is known as a testamentary trust. This is an arrangement through which you leave money for the beneficiary that they can’t access immediately. If you go this route, you will do so under the official heading of a will or trust. This means that the arrangement you set up won’t be funded until you are gone.

Establishing a trust is a complex process

A special needs trust can be set up with money that you provide for the purpose. You will need to think about how long the trust should last, how much money you can spare, and what types of expenses the money should cover. You will then need to choose someone you can rely on to be the trustee after you pass.

Once your trust is created, you will need to have it signed, notarized, and registered with the IRS. After this is done, you can begin to invest funds in it. You can be the sole or primary funding source.