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California residents may have heard that Barack Obama signed the Special Needs Trust Fairness Act into law in December 2016. The new law modifies a rule that says a first-party special needs trust needs to be created by a disabled person’s parent, grandparent or guardian. Now, those who are disabled but have the mental capacity to make decisions on their own can create a first-party special needs trust by themselves.

Such a trust is funded with the assets that a disabled person may have had. This allowed them to keep those assets while remaining eligible for government benefits such as Medicaid and SSI. While funds can be used for the general purposes of helping a disabled person, there are restrictions on how the money can be used. For instance, it cannot be used to pay rent or utilities, and it cannot be used to purchase items for anyone other than the beneficiary.

Special needs trusts are legal because the government doesn’t want to penalize those who are disabled. Once the trust has been created and funded, an individual can apply for government benefits right way. This provides a disabled individual with the opportunity to get the most from his or her assets without jeopardizing their access to key financial resources.

The use of a special needs trust may help a disabled individual retain access to government benefits without depleting personal assets. An attorney may be able to help an individual create such a trust or review a trust that may already exist. Doing so may increase the odds that it is created in a manner consistent with the law.