Your special needs trust was built around your family’s life at a specific point in time: your child at a particular age. Your family’s situation. The benefits rules as they stood on the day you signed. And while your attorney likely built flexibility into that plan, things can change quickly.
That isn’t because the plan is flawed; it’s just what happens when you plan for a life that is still being lived. The real question isn’t whether things have changed – they probably have. It’s whether your plan has been updated to accommodate those changes.
September is National Preparedness Month, which usually calls to mind earthquake kits and evacuation routes. Those matter, but so do the documents that decide who steps in, who holds authority, and how your child is provided for when you can no longer do so yourself.
What a special needs plan review covers
A review is not a matter of completely overhauling your plan. In most cases we are looking at six main things, and most of them are fairly quick to confirm.
The people you named
Trustee. Successor trustees. Trust protectors. Remainder beneficiaries. Agents under the power of attorney and advanced health care directive. You chose these people at a particular moment in time, often years ago, and sometimes before the people involved had any real sense of what the job entails.
Are the people you named still able to do the job? Have any of them moved away, had something life-changing happen, or possibly even passed away?
The path the money takes
A third-party special needs trust is connected to your estate plan, but it typically does not receive anything until your death. At that time, assets can pass to the special needs trust through the instructions in your revocable living trust and through your beneficiary designations. Those two tools are where problems often hide. If either one is outdated, the trust can sit empty while the money is directed somewhere it shouldn’t be.
Your disabled loved one’s current circumstances
Age, living situation, employment, benefits status, level of support needed. A plan built for a fourteen-year-old is not necessarily the right plan for a twenty-six-year-old.
Your assets
New accounts, property that has been sold, real estate that was never titled in the trust, an inheritance you received, an equity event. Assets tend to change faster than documents do, but those changes make a difference.
The rules
In California, the laws change constantly. Public benefits thresholds move. Tax laws shift. There have been some meaningful changes in 2026, and it looks like there are more coming in 2027. (We’ll go into more on those below.)
The practical parts
These are not legal documents, but they matter quite a bit. These include your letter of intent, care team contacts, where the documents live and who has copies and more. For our Trust Maintenance Program members, we provide a Dani Plan vault to keep all of this information together.
Five life events that should trigger a review
In addition to an annual calendar reminder there is a list of things every family should watch for. If any of these have happened since your plan was signed or last reviewed, we recommend scheduling a review call.
1. The people you named have changed
A trustee moved out of state, retired, had a health change, or turned out to be less available than everyone assumed. A named person has died. A relationship has shifted significantly. Any of these can upset the part of the plan you may have been most confident about.
2. Your loved one’s situation has changed
Turning 18 is one of the biggest things to watch for: legal authority changes at that birthday whether or not anyone has prepared for it. When your child turns 18, you lose the ability to be involved in their finances, their medical care, and many other decisions unless legal paperwork is in place.
Starting work, moving into supported living, a change in benefits status, or a new diagnosis can also change things. Each of these can shift how the trust needs to work.
3. Your family has changed
Marriage, divorce, or remarriage (yours or an adult child’s). A birth or a death. A sibling whose willingness or capacity to be involved is not what it was when you named them. Family structure is a stronger part of your estate plan documents than most people realize.
4. Your assets have changed
Perhaps you bought or sold real estate. Or you opened a retirement account, a brokerage account, or a new bank account. Maybe you received an inheritance. Every new account is a new beneficiary designation, and every new designation is a chance for changes that need to be made
5. Someone else made a gift
This is the one families almost never see coming. A grandparent names your child directly in their will. A well-meaning aunt leaves a bequest. Someone sets up a college account or hands over a check. The gift is generous and the intent is loving, but it can interrupt needs-based benefits because the money arrives in your child’s name rather than in the trust built to hold it.
Something to bring up at the next family gathering: anyone who wants to leave something to your child can direct it to the special needs trust instead. Same generosity with no disruption in benefits. Most relatives are glad to know – they just needed someone to tell them.
What changed in 2026
Three developments this year are important to know about because they affect plans that were written for previous laws.
The Medi-Cal asset limit came back
On January 1, 2026, California reinstated the asset limit for non-MAGI Medi-Cal programs: $130,000 for an individual, plus $65,000 for each additional household member, which puts a couple at $195,000. From 2024 through 2025 there was no asset test at all for these programs, and a lot of families stopped thinking about it.
Two clarifications matter here. First, SSI-linked Medi-Cal is not affected – the $2,000 SSI resource limit is still the important number there. Second, current enrollees report assets at their first annual renewal during 2026, not all at once in January.
We don’t handle Medi-Cal applications or eligibility work; we refer that out to people who do it well. What we care about is the planning consequence. Assets held in a properly drafted third-party special needs trust don’t count toward that asset limit, but assets held in your child’s own name do.
ABLE accounts changed in two ways
The annual contribution limit rose to $20,000 for 2026. Notably, this is the first year the ABLE limit and the federal gift tax annual exclusion are different numbers — the gift tax exclusion stayed at $19,000. If you or a grandparent has been contributing on autopilot at last year’s figure, you may have been unaware of that. An account owner who works and isn’t participating in an employer retirement plan may be able to contribute additional earned income beyond that limit, up to $15,650 in the continental U.S.
The larger change is eligibility. ABLE accounts previously required that the disability began before age 26. As of 2026, that moves to before age 46. If your family was told years ago that your loved one didn’t qualify, that answer may no longer be true. This is a change worth looking into, even if nothing else warrants a review at this time.
The estate tax exemption increased
For several years, plans were drafted around an exemption scheduled to be cut roughly in half at the end of 2025. That reduction never happened. Instead, the federal estate and gift tax exemption increased to$15 million per person for 2026 (indexed for inflation), $30 million for a married couple using portability, and it became permanent (well, permanent until Congress changes it, which is the only kind of “permanent” that tax law offers).
If your documents contain formula language written for a much lower exemption, that formula is now dividing your estate differently than you intended, and you may not be aware of it.
“But an attorney drafted my trust”
We hear this often, and it’s a fair thing to think. Here is the distinction that matters: a good document is right for the day it is signed. What ages isn’t the drafting. It’s whether your plan keeps up with everything else.
The attorney who drafted your trust in 2016 could not have known that your trustee would move across the country, that your disabled child would start working, or that California would eliminate the Medi-Cal asset limit and then bring it back. Nobody knew. A document cannot update itself, and no amount of drafting skill will change that.
Although we review documents that need significant updates, we also review plenty of trusts that were drafted carefully and need a small amendment, or even nothing at all. That is a good outcome. Having a specialist review your plan does not mean a lot of work is in store – it often just means making sure everything is still working as it should.
The problem we find most often
Beneficiary designations may not seem like they would matter much, but this is an issue that comes up again and again.
A retirement account that still names the child directly. A life insurance policy that says something like, “my children, equally.” An old brokerage account that carries a transfer-on-death instruction nobody remembers setting up. These designations override your trust – they are their own set of instructions, and they’re not governed by the other documents in your plan.
A direct distribution to a beneficiary who relies on needs-based benefits can interrupt those benefits at exactly the moment a family has the least capacity to deal with it. The fix is usually straightforward; it just has to happen now rather than later.
Retirement accounts deserve their own conversation. Whether a special needs trust should be named as beneficiary of a retirement account is a question for your attorney, and the rules shifted substantially in 2020. Many people used to advise against this, but the answer may be different than what you were told in the past.
What a review usually looks like
A review usually consists of one meeting with an attorney, with the documents and a current list of accounts in front of us. It ends in one of three places: 1) everything still works and you leave with that confirmed; 2) a small amendment brings the plan back into alignment; or 3) something significant has changed and the plan needs a more substantial update.
Most families land in the first two – but even if you do need significant changes, it’s better to make them now.
Doing this on a schedule
We suggest a review at least every 2 to 3 years, and sooner if anything on the trigger list above has happened. Some families track that themselves and call when something shifts. Others would rather have it built in – our Trust Maintenance Program includes an annual legal wellness review, which many of our clients feel is the way to keep this from becoming the thing that gets bumped to next year, every year.
We Are Here to Help
If you read the list above and recognized your own situation somewhere in it, give us a call. Our team will be happy to schedule you with an attorney who can help.
We work with families across California on special needs planning, estate planning, and trust administration. If it has been a few years, or if something on this page gave you pause, we’d be glad to take a look with you.
