When a Special Needs Trust Is Needed

When a Special Needs Trust Is Needed

Divorce is stressful. Dealing with the special needs of a spouse or child only adds to the stress. When a divorce settlement is being negotiated, support for a disabled spouse or child needs to be handled carefully. In some cases, a special needs trust provides the right solution to the problem of supporting a disabled family member without affecting their eligibility for other benefits.

Support for a Disabled Spouse

Let’s say Martha decides to divorce George, her husband of 22 years. Since he is in the early stages of Alzheimer’s disease, George will need escalating amounts of nursing care for the rest of his life. Martha served as the couple’s primary source of income and will pay spousal support to George. As their attorneys negotiate, they realize that support given directly to George may reduce or eliminate his eligibility for public benefits like Supplemental Security Income (SSI) or Medicaid.

The attorneys set up a special needs trust for George. His spousal support payments will deposit directly into the trust. The trustee will pay George’s expenses directly. This type of arrangement should provide money for his care without affecting other benefits.

Support for a Special Needs Child

When children are involved in a divorce, child support is negotiated as part of a divorce settlement. Special care is needed to provide for children with special needs.

The special needs trust for a child is similar to the one for a disabled spouse: support goes to a trust instead of to the child, then the trust is used to pay for the child’s care. However, child support typically stops at age 18 or 19 if the child is in school. Depending on the disability, a disabled child may need high levels of care for decades to come.

California Family Code 3910 states that parents have an equal responsibility, when possible, to support disabled children “of whatever age” who cannot support themselves. So, support payments may continue beyond age 19 for disabled children. As with the disabled spouse, the money should go directly to a special needs trust instead of to the child.

Final Thoughts

For this all to work, the special needs trust must be properly set up. Typically, a court order is needed. And government regulations and eligibility rules for public benefits are complicated. When a special needs trust is needed, consult with an attorney before trying to set it up yourself.

To discuss how to handle divorce issues, including special needs trusts, please call us at 415-293-8314. The attorneys at the Law Offices of Judy L. Burger assist clients in San Francisco, Marin County, Santa Barbara, Ventura/Oxnard, San Jose, Gold River (Sacramento), and surrounding communities. We are opening a new Beverly Hills office soon.

Protect Yourself: Update These Documents after a Divorce

If you are recently divorced, you need to make sure you update key documents. Many people remember to change the name on their driver’s license, credit cards, and so on. While that is important, there are other documents that are arguably more so; the failure to change certain documents could result in a different distribution of your property than you might intend.

Whether or not you initiated the divorce proceedings, you probably have strong feelings about whether you want your ex to have your property or insurance benefits if something happens to you. Unfortunately, too often, people overlook or postpone dealing with this issue, with potentially disastrous results.

Here is a list of some of the types of documents you will want to update:

  • employment documents, such as payroll data and withholdings;
  • financial documents, such as bank and brokerage accounts, as well as credit cards;
  • government and identification documents, such as your Social Security card and driver’s license; and
  • documents that relate to the ownership of property, such as car titles.

Beneficiary designations should be at the top of your list. You will need to identify all of these, which typically include insurance policies, retirement plans, financial brokerage accounts, and bank accounts that are payable on death (POD).

Other critical documents that need immediate attention are your will, any trusts, and any powers of attorney or advance directives. California Probate Code § 6122 provides that a divorce automatically revokes certain aspects of a will. However, that automatic revocation may cause other unintended consequences where property is concerned.

Even if you are relatively healthy, life is unpredictable. To ensure that your wishes are carried out, it is best to update your key documents and to consult with an experienced California lawyer who can help you identify important issues that may result from your divorce.

The attorneys at the Law Offices of Judy L. Burger have extensive experience in family law matters and can advise you about many of the consequences of divorce. Contact us today to learn how our attorneys can help you in your case: (415) 293-8314.