Planning for a Disabled Heir in California: What Families Need to Know

When it comes to estate planning, one of the most delicate and important considerations is how to provide for a disabled child or heir. In California, proper planning can ensure your loved one’s long-term financial support without jeopardizing their access to public benefits like Medi-Cal or Supplemental Security Income (SSI).

Here’s how to approach it wisely—and compassionately.

The Challenge: Protecting Benefits While Providing Support

Many public assistance programs that support individuals with disabilities have strict income and asset limits. If you leave an inheritance directly to a disabled heir, whether through a will or a standard trust, it could disqualify them from vital services they rely on for health care, housing, and daily living support.

Without careful planning, your good intentions could unintentionally cause harm.

The Solution: Special Needs Planning

To address this, California families often turn to special needs planning—a tailored estate strategy that ensures a disabled heir can benefit from family support without losing public assistance eligibility. The cornerstone of this approach is the Special Needs Trust, also called a Supplemental Needs Trust.

This type of trust allows assets to be managed on behalf of the disabled individual without being counted as their personal resources. A trustee is appointed to manage the funds and use them for expenses that improve the heir’s quality of life—such as therapy, education, travel, or home modifications—while government benefits continue to cover basic needs.

Types of Special Needs Trusts

There are different types of special needs trusts, and the right one depends on who is funding it and when:

• Third-party trusts: Funded by family members (usually parents or grandparents) and often set up as part of a comprehensive estate plan.

• First-party trusts: Funded with the disabled person’s own assets, such as from a personal injury settlement.

• Pooled trusts: Managed by nonprofit organizations and may be a cost-effective option for smaller estates.

Each has pros and cons, and it’s crucial to choose the one that best aligns with your heir’s needs and your goals.

Other Considerations

Choosing a Trustee: This is a critical decision. You need someone who is not only trustworthy and financially responsible but also understands the disabled heir’s unique needs. In some cases, using a professional trustee may be the most secure option.

Letter of Intent: This isn’t a legal document, but it’s incredibly valuable. It provides guidance to the trustee about your heir’s routines, preferences, medical needs, and values—ensuring care and decisions remain consistent with your wishes.

Life Insurance: Many parents choose to fund a special needs trust with life insurance, allowing them to set aside resources even if they’re no longer around.

Don’t Wait Until It’s Urgent

Planning for a disabled heir is a proactive step that brings peace of mind—not only to parents and caregivers but to the entire family. It ensures your loved one will be supported and protected in the future, no matter what lies ahead.

A well-crafted estate plan is not a one-size-fits-all solution. If your family includes a loved one with a disability, your estate plan should reflect that reality—thoughtfully and strategically.

Need Help Planning for a Disabled Heir?

We’ve helped many California families create customized plans that protect their disabled loved ones while preserving access to essential benefits. If you’d like to discuss your options, we’re here to guide you every step of the way.

📞 Call (626) 460-1763📧 Email LV@MoravecsLaw.com

Contact the top-rated California trust and probate attorneys Moravec, Varga & Mooney today to schedule a telephonic consultation. Have questions? call (626) 460-1763 or email LV@MoravecsLaw.com.

Southern California Probate Lawyer Serving all counties in California, including Los Angeles, Riverside, San Bernardino, Sacramento, Santa Cruz & Beyond.