• Certified Specialist, Estate Planning, Trust & Probate Law, The State Bar of California Board of Legal Specialization
• Principal, Cookman Law, PC
• J.D., UC Berkeley School of Law
• LL.M., Estate Planning, Golden Gate University
• Law Clerk, Chief Judge Anthony J. Scirica, Third Circuit Court of Appeals (Philadelphia, PA)
• California State Bar No. 227833
• Parent of child with special needs

Ellen S. Cookman, Esq.

Estate Planning Goals:

• Maximize quality of life
• Protect child
• Maximize independence
• Maximize public benefits
•  Name “surrogate parents”
• Avoid court system

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Income Stream

Health Insurance

Supplemental Security Income (SSI)

• Resource limit: $2000
• Income limit: $1,183/mo

Earned income decreases SSI 50¢/every $1 of income; unearned income decreases SSI $1/every $1 of income

Social Security Disability Insurance (SSDI)/CDB Benefits

• Resource limit: none
• Income limit: $1,470/mo

Only earned income interferes

Medi-Cal (Medicaid)

• Resource limit: NONE! (as of 1/1/24)
• Income limit: approx. $1670/mo

Includes earned and unearned income

Medicare Benefits

Which Public Benefits does Child Receive?

• Resource limit: none
• Income limit: none

Note: higher income 🡪 higher monthly adjustment amount

Special Needs Trust

• Irrevocable trust
• Holds assets for disabled person's benefit
• DOES NOT interfere with public benefits
• Like a safety net!

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Requirements for 3^rd Party SNTs

To protect SSI and Medi-Cal eligibility, a 3^rd party SNT must meet the following requirements:

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• Beneficiary cannot have the authority to revoke or terminate

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• Beneficiary cannot direct the use of trust assets or demand distributions

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• Distributions are purely discretionary

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• Trust is valid under state law

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Which Type to Establish?

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Different Types of SNTs

Source of Funds

Who Establishes

Distribution on Death

Third Party SNT

First Party (d)(4)(A) SNT

(d)(4)(C) Pooled SNT

Anyone except beneficiary

Anyone except beneficiary

Grantor's wishes

Disabled beneficiary's funds before age 65

Beneficiary, parent, grandparent, Guardian, Court

Medi-Cal payback; then remainder beneficiaries

Disabled beneficiary's funds

Beneficiary, parent, grandparent, Guardian, Court

Non-profit Trustee; or, Medi-Cal payback, then remainder beneficiaries

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• Family Member
• Friend
• Private Professional       

Fiduciary

• Bank
• Nonprofit
• Pooled Trust
• Combination

Choice of Trustee

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Oversight Available for SNT ?

• Typically NO court involvement
• Trust Protector
• Co-Trustees
• Advisory Committee

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Memorandum of Intent

(separate from SNT)

Informal letter from parent:

• What makes child happy/sad?
• Food restrictions?
• Housing preferences
• Favorite Activities

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Alternative to SNT:

Dynasty Trust

• OK if beneficiary receives SSDI and/or Medicare only
• Beneficiary OR someone else can act as trustee
• Irrevocable, Non-Grantor Trust
• Protection from spouses, creditors
• Estate tax savings to next generation

ABLE Account:

• Savings account for disabled person with

Medi-Cal payback provision (but not in California…)

• Does not interfere with public benefits

(with limitations)

• Income earned grows tax-free, and qualified withdrawals are tax-free
• Contribution limits of $18,000/year (as of 2024) from ALL sources

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What is it?

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• To be eligible:

ABLE Account: 

Eligibility & Limitations

- Beneficiary must have a “qualifying disability,” AND

- Beneficiary’s disability must have manifested before age 26 (increasing to age 46 in 2026)

• To be used only for “qualified disability expenses"

• Only one ABLE account can be established per disabled individual
• SSI suspended if total amount in account exceeds $100,000, but can continue to receive Medi-Cal

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Qualified Disability Expenses

A Qualified Disability Expense is ANY expense that is incurred as a result of living with a disability and is intended to improve quality of life. Qualified expenses include, but are not limited to:

• Education
• Health and wellness
• Housing (should be spent in same month as withdrawn from ABLE account)
• Transportation
• Legal Fees
• Financial Management

• Employment training and support
• Assistive Technology
• Personal support services
• Oversight and monitoring
• Funeral and burial expenses

- 529 savings account established for disabled beneficiary can be rolled over into the beneficiary’s ABLE account up to $18,000/year.

- Beneficiaries earning income from employment can contribute more than $18,000 annual cap, up to the Federal Poverty Level, currently $15,060 for a single person, if not participating in employer’s retirement plan.

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IMPORTANT:

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ABLE accounts for CA residents not established in CA are now subject to Medi-Cal recovery claim!

• If non-CalABLE account est. before 1/1/23, no recovery claim

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Comparing ABLE Account with Third Party SNT

Questions

ABLE Account

Third Party SNT

Who can benefit?

Only persons disabled before age 26 (increases to age 46 in 2026)

Any person with a disability

Who inherits on death of person with disability?

Who can control?

How many can person have?

Who can fund?

Medicaid first, then to beneficiary’s heirs (but exception in California)

Beneficiary’s heirs or whomever is named in document

Anyone except beneficiary and their spouse

Beneficiary & likely their legal guardian, conservator, or agent

Unlimited

Anyone, except beneficiary (must use first party SNT)

Anyone, including beneficiary

One

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Comparing ABLE Account with Third Party SNT...

Questions

ABLE Account

Third Party SNT

How much can fund in a year?

Is funding gift-tax free?

Is there a cap in how much can be in account?

How is income taxed?

What type of distributions can be made?

$18,000 (or annual gift exemption)

Yes

Yes, currently $100,000 limitation for SSI recipients & up to State 529-plan limitations

No income tax

Only "qualified disability expenses" as defined by government

Unlimited

No

No

Taxed as a non-grantor trust at highest marginal tax rate

No limitation, except that certain disbursements may reduce or eliminate SSI or Medicaid eligibility

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CalABLE Account 

• CalABLE account now available:

• Need beneficiary’s SSN, authorized legal rep’s SSN, bank account info

• Reloadable, prepaid Visa debit card now available

https://www.calable.ca.gov/

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Decision Making For Young Adults

Main types of decision-making for individuals with disabilities

1. Surrogate decision-making (i.e. conservator) 
2. Delegated decision-making (i.e. DPA, AHCD) 
3. Shared decision-making 
4. Supported decision-making 

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Delegated/Shared Decision-Making

1. Durable Power of Attorney 
2. Advance Health Care Directive 
3. AB 1424 – Information Provided by a Family Member
4. Social Security representative payee 

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Drawbacks:

• These approaches are voluntary: principal can withdraw powers at any time
• Does not empower or train principal to make good decisions

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What is Supported Decision-Making?

1. Helps people with disabilities make their own decisions about their lives with the support of people they trust

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• People with disabilities retain their legal rights

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• Less restrictive alternative to conservatorship

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Note: SDM describes how many people already make decisions!

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SDM in US

1. In 2011-2017, several national conferences promoted SDM  
2. CA passed AB 1663 in 2022 recognizing SDM

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About Cookman Law, PC

Palo Alto law firm serving all of California

3 attorneys, 7 support staff

We charge a flat fee for estate planning, special needs planning and trust administration

We do not assist with public benefits applications

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• 650-690-2571
• info@cookmanlaw.com
• www.cookmanlaw.com
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