What is a self-settled trust?
A self-settled trust is a type of trust agreement where the individual setting up the trust, known as the settlor or grantor, is also the beneficiary of the trust. The self-settled trust is created to help people with disabilities receive public benefits without being disqualified due to their own assets. In California, self-settled trusts are established under the Supplemental Security Income/State Supplementary Program (SSI/SSP) regulations, and further described in Title 22 California Code of Regulations Section 50202. The goals of a self-settled trust are to protect assets from being counted as resource when determining eligibility for public benefits, and to provide a means of safely managing assets for an individual with disabilities. Assets in the trust are not counted as resources for SSI/SSP programs, and income from the trust is not counted as income. Additionally, the trust can provide for expenses that cannot be paid for from public funds, such as medical and dental care, educational supplies, and even transportation. The trust may also be used to pay a representative payee to manage funds on behalf of the beneficiary. When establishing a trust, it is very important to follow the instructions and regulations outlined in Title 22 to ensure that the trust is set up properly and is valid. In addition, it is important to name a trustee who can manage the trust assets and who is knowledgeable about SSI/SSP regulations and disability planning.
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