According to the National Organization on Disability, nearly 54 million Americans are coping with special needs. That’s almost one-fifth of our population.Thanks to improved care and advancements in medical technology, many individuals with special needs are outliving their parents or caregivers. Special needs planning is a necessity for anyone who has a disability or is caring for someone with a disability, and more specifically, a special needs trust. If you are a caregiver, you may be wondering how much does a special needs trust cost in California? The cost to set up a special needs trust depend on many factors. First, determine whether a special needs trust is what you need.
What is a Special Needs Trust?
A “Special Needs Trust” is a specific type of trust for the benefit of someone who is disabled. It is necessary to plan for the future care and needs of a disabled loved one in the event the caregiver is no longer able to continue providing care. Special needs trusts are irrevocable, and protected from lawsuits and creditors. The type of special needs trust you should establish depends on the type of care and support you are looking to provide. A General Support Special Needs Trust is considered the primary source of benefits for the disabled. A Supplemental Care Special Needs Trust, which only provides secondary financial support once government benefits are exhausted, is the most common type of trust used in special needs planning.
What does it cost?
The fees for setting up any trust, including a special needs trust, depend on several factors. Two primary factors are the size of the trust and the nature of the assets to be included in the trust. The more complicated the trust agreement is, the more customization that is required, can increase the expense of setting up the trust. In California, a special needs trust with assets around $600,000 could cost between $2,000 and $3,000. However, this is just a rough estimate. The actual cost could be less or more, depending on each client’s specific situation.
Costs of administration
You need to also consider the fees for administering the trust while you are alive, as well as fees for any necessary financial, legal or tax advice throughout the term of the trust. Most likely, the cost of administering the trust will exceed the cost of creating the trust. There are various tasks the trustee must perform throughout the period of the trust, many of which will incur some expense. Trustees are entitled to compensation for their services, as well. So, although you may spend a few thousand dollars to establish the trust, the cost of administering it for the lifetime of your loved one could be substantial.
If you have questions regarding special needs trusts, or any other estate planning needs, please contact the Schomer Law Group either online or by calling us at (310) 337-7696.