McGee

FACTS AND HISTORY OF THE PROCEEDINGS

A. Legal background

A special needs trust is a type of discretionary spendthrift trust designed “to preserve public assistance benefits for the [disabled] trust beneficiary while, simultaneously, providing for the beneficiary’s ‘special needs’ that are not met by public assistance.” (Sen. Com. on Judiciary, Analysis of Assem. Bill No. 3328 (1991-1992 Reg. Sess.) as amended June 10, 1992, pp. 2-3; see Recommendation: Special Needs Trust for Disabled Minor or Incompetent Person (Apr. 1992) 22 Cal. Law Revision Com. Rep. (1992) p. 993.) Specifically, federal law authorizes a severely disabled individual under the age of 65 to shelter his or her assets in a safe-harbor trust established for the individual’s sole benefit by the individual (the trust beneficiary), the beneficiary’s parent, grandparent, or legal guardian, or by a court. The trust assets are not considered to be the beneficiary’s resources when determining whether the beneficiary qualifies to receive needs-based public assistance, in particular Supplemental Security Income (SSI) and Medi-Cal. The beneficiary may shelter the assets in the special needs trust on condition the state…