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Special Needs Trust

A Special Needs Trust (SNT) allows for a disabled person to maintain his or her eligibility for public assistance benefits, despite having assets that would otherwise make the person ineligible for those benefits. There are two types of SNTs: First Party and Third Party funded.

1.   First Party

First party SNTs are funded with assets that belong to the individual. These trusts must include federal and state provisions which require notice and payback to the State upon the death of the trust beneficiary or earlier termination of the trust. DHCS is required to recover up to an amount equal to the total medical assistance paid by Medi-Cal on the beneficiary’s behalf. 

First party SNTs are classified as either (d)(4)(A) SNTs which are established under 42 USC 1396p(d)(4)(A) or  Pooled SNTs established under 42 USC 1396p(d)(4)(C) :

  • A (d)(4)(A) SNT can only be established for a disabled individual under the age of 65.
  • A Pooled Trust can be established for a disabled individual of any age, and must be established and managed by a non-profit association.  A separate account is maintained for each beneficiary, but funds are “pooled” together for investment purposes.
2.   Third Party funded
Third party SNTs are funded with assets belonging to a person other than the trust beneficiary and the beneficiary never has possession of the funds.  Third party trusts are not subject to recovery by the Department of Health Care Services (DHCS).
At trust establishment, the trustee is required to notify DHCS at least 15 days prior to the hearing pursuant to Probate Code Sections 3600-3605 and 3610-3613.  Additionally, upon trust termination, the trustee is required to notify DHCS pursuant to Title 22, 50489.9 (d)(2).
 

Notices can be submitted below via our online forms or mailed to Department of Health Care Services, Special Needs Trust Unit, MS 4720, P.O. Box 997425, Sacramento, CA 95899-7425.

 Contact Information

Phone: (916) 650-0490

Fax: (916) 440-5231               

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Last modified on: 1/18/2017 4:06 PM