What is the difference between a revocable living trust and a special needs trust?

The difference between a revocable living trust and a special needs trust is an important one in California’s disability planning law. A revocable living trust is an arrangement in which a person, known as the grantor, transfers assets from themself to a trust. The grantor maintains control of the trust and can appoint a trustee to manage it. The grantor also retains the right to change, amend, or revoke the trust at any time. A special needs trust, in contrast, is established and funded by a third party, often to provide financial support to a disabled individual without disrupting the individual’s eligibility for certain social security benefits. These trusts are designed to provide support while preserving the beneficiary’s eligibility for public assistance and other government benefits. Unlike a revocable living trust, the assets in a special needs trust are not managed directly by the beneficiary, and the trust cannot be changed, amended, or revoked without the permission of a court. Funds from the trust can be used to pay for a variety of expenses related to the beneficiary’s disability, such as medical equipment and therapies, transportation, and more.

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What is the difference between a revocable living trust and a special needs trust?

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