Special Needs Trusts & Tri-Counties Regional Center: A Santa Barbara Guide

For families in Santa Barbara County, the Tri-Counties Regional Center (TCRC) is the lifeline for services ranging from early intervention to adult residential support. For nearly five decades, TCRC has provided essential care to individuals with developmental disabilities throughout Santa Barbara, San Luis Obispo, and Ventura Counties.

However, a common point of confusion arises when a family establishes a Special Needs Trust (SNT) for a loved one:

• How does the Regional Center view these funds?
• Will a trust payout disqualify your child from TCRC-funded programs?
• Can the Regional Center force you to spend trust money before providing services?

As a Santa Barbara SNT attorney, I help families navigate these specific local interactions to ensure care remains uninterrupted.

About Tri-Counties Regional Center

TCRC is one of 21 Regional Centers in California, serving individuals with developmental disabilities in Santa Barbara, San Luis Obispo, and Ventura Counties.

Office	Services	Eligibility
Santa Barbara (Calle Real)	Early intervention, respite care, day programs, residential services, employment support	Intellectual disability, autism, cerebral palsy, epilepsy, or similar conditions originating before age 18

The TCRC "Private Resource" Rule

Here's where many families run into trouble.

According to Tri-Counties Regional Center internal policies (specifically Guideline 10201), trust funds are generally considered a "private resource." This means that TCRC often expects these funds to be used prior to the authorization of public funds, unless the trust instrument is legally drafted to prohibit certain distributions.

The Technical Cliff Where DIY Trusts Fail

If your trust is not drafted with specific "supplemental" language that complies with the California Lanterman Act, TCRC may deny funding for services like respite care or specialized therapies, citing the trust as an available resource. This single drafting error can cost your family tens of thousands of dollars in lost services annually.

What "Supplemental" Language Must Include

A properly drafted SNT for TCRC coordination must contain:

• Explicit "Supplement, Not Supplant" Language: The trust must state that distributions are intended to supplement, not replace, government benefits
• Sole Benefit Requirement: All distributions must be for the sole benefit of the beneficiary with special needs
• Discretionary Distribution Language: The trustee must have absolute discretion over distributions—not mandatory payment requirements
• Prohibited Distribution Categories: The trust should specifically prohibit distributions for things that would affect SSI (food, shelter) or TCRC eligibility
• Lanterman Act Compliance: Reference to California Welfare & Institutions Code sections 4500-4906

Third-Party SNTs: The Preferred Strategy for Santa Barbara Families

For parents in Montecito, Goleta, or Santa Barbara planning their estates, a Third-Party Special Needs Trust is almost always the superior choice.

Third-Party SNT (Recommended)

• Funded by: Parents, grandparents, other family members
• Medi-Cal Payback: NO payback required at beneficiary's death
• Remainder: Passes to family or other beneficiaries
• TCRC Coordination: Easiest to draft for benefit preservation
• Best for: Estate planning, inheritances, life insurance

First-Party SNT

• Funded by: Beneficiary's own assets (lawsuit settlements, inheritance)
• Medi-Cal Payback: YES - state must be reimbursed first at death
• Remainder: Goes to Medi-Cal before family
• Court Oversight: Often requires court approval
• Best for: Personal injury settlements, direct inheritances

Why Third-Party SNTs Work Better with TCRC

We draft Third-Party SNTs to ensure that assets are used only for "quality of life" enhancements—such as:

• Specialized computers & adaptive technology
• Travel & vacations with caregivers
• Entertainment & cultural activities
• Private fitness & wellness programs
• Educational enrichment beyond school
• Vehicle modifications & transportation

By funding only items that TCRC does not cover, we preserve the beneficiary's "need" for Regional Center core services—ensuring they continue to receive respite care, day programs, and residential support.

The ABLE Account Alternative

For families managed by the TCRC's Santa Barbara office, we often recommend pairing an SNT with a California ABLE Account.

California ABLE Account: 2025 Limits

Annual Contribution	SSI Exemption	Impact on Medi-Cal
$19,000	$100,000	$0

Key Benefits:

• Completely ignored by SSI and Medi-Cal (up to $100,000 balance)
• Beneficiary control: Unlike an SNT, the beneficiary can manage their own ABLE account
• "Pocket money": Great for day-to-day expenses without trustee involvement
• Tax-free growth: Investment earnings are not taxed if used for disability expenses
• No Medi-Cal payback if designated beneficiary is named

SNT + ABLE: The Combined Strategy

For most Santa Barbara families, we recommend:

1. Third-Party SNT for large inheritances, life insurance proceeds, and long-term asset management
2. ABLE Account funded annually ($19,000/year) for "pocket money" and day-to-day expenses
3. Coordination: The SNT trustee can make annual contributions to the ABLE account, giving the beneficiary independence while protecting the larger trust corpus

Common TCRC Scenarios We Handle

Scenario 1: Child Turning 18

Your child with developmental disabilities is about to turn 18. You need to:

• Establish SSI eligibility (income and asset limits)
• Continue TCRC services into adulthood
• Transfer assets without disqualifying them
• Consider Limited Conservatorship if needed

Scenario 2: Inheritance or Life Insurance

A grandparent wants to leave money to a grandchild who receives TCRC services:

• Direct inheritance would disqualify SSI and Medi-Cal
• Third-Party SNT preserves all benefits
• Life insurance can be owned by the trust
• No Medi-Cal payback at beneficiary's death

Scenario 3: Personal Injury Settlement

Your loved one receives a settlement from an accident or medical malpractice:

• Settlement would eliminate SSI/Medi-Cal/TCRC eligibility
• First-Party SNT (d)(4)(A) trust required
• Court approval typically needed
• Medi-Cal payback applies, but benefits are preserved during lifetime

Scenario 4: Parents' Estate Planning

Parents in Montecito want to include a child with special needs in their estate plan:

• Standard inheritance would disqualify child from benefits
• SNT sub-trust within parents' living trust
• Siblings can be named as remainder beneficiaries
• Trustee succession planning is critical

TCRC Services vs. SNT Distributions: The Critical Distinction

The key to preserving TCRC benefits is understanding what the Regional Center will and won't cover:

Category	TCRC Covers?	SNT Should Cover?
Respite care	Yes	No (would reduce TCRC funding)
Day program services	Yes	No
Residential placement	Yes	No
Employment support	Yes	No
Vacations & travel	No	Yes - perfect SNT use
Electronics & technology	Limited	Yes
Private therapies (music, art, equine)	Usually no	Yes
Entertainment (concerts, sports)	No	Yes
Vehicle modifications	Limited	Yes

The Golden Rule: The SNT should fund things that enhance quality of life but that TCRC doesn't provide. This preserves the beneficiary's "need" for Regional Center core services while allowing the family to provide extras that make life better.

Choosing a Trustee for TCRC Coordination

The trustee of a Special Needs Trust must understand both the legal requirements and the practical realities of TCRC coordination:

Family Member Trustee

• Pros: Knows beneficiary best, no ongoing fees, emotionally invested
• Cons: May not understand SSI/TCRC rules, family dynamics, burnout risk
• Best for: Smaller trusts with clear family succession

Professional Fiduciary

• Pros: Expert knowledge, no family conflict, continuity
• Cons: Annual fees (typically 1-1.5%), less personal knowledge
• Best for: Larger trusts, complex family situations

Pooled Trust

• Pros: Professional management, lower minimums, non-profit oversight
• Cons: Less individual attention, fund commingled with others
• Best for: Smaller amounts, no suitable family trustee

Frequently Asked Questions

Will a Special Needs Trust affect my child's Tri-Counties Regional Center services?

It depends on how the trust is drafted. Under TCRC Guideline 10201, trust funds may be considered a "private resource" that must be used before public funding. A properly drafted SNT with specific "supplemental" language can protect Regional Center eligibility by ensuring trust funds only enhance—not replace—TCRC services.

What is the difference between a First-Party and Third-Party Special Needs Trust?

A First-Party SNT is funded with the beneficiary's own money (often from a lawsuit settlement) and requires Medi-Cal payback after death. A Third-Party SNT is funded by family members and has no Medi-Cal payback requirement—making it the preferred choice for Santa Barbara families planning their estates.

Can I use a California ABLE Account with TCRC services?

Yes. In 2025, California ABLE accounts allow up to $19,000 in annual contributions that are completely ignored by SSI and Medi-Cal. ABLE accounts can be used alongside a Special Needs Trust to provide "pocket money" the beneficiary controls without affecting Regional Center eligibility.

Where is the Tri-Counties Regional Center Santa Barbara office?

The TCRC Santa Barbara office is located on Calle Real in Santa Barbara. TCRC serves Santa Barbara, San Luis Obispo, and Ventura Counties, providing services from early intervention through adult support for individuals with developmental disabilities.

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Protecting Your Family's Future with TCRC

If your family receives services through the Tri-Counties Regional Center, your Special Needs Trust must contain specific language to prevent the loss of state-funded care.

We serve families throughout Santa Barbara, Goleta, Carpinteria, Montecito, and the Santa Ynez Valley.

Schedule a consultation: Contact Us | Call: (818) 291-6217

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Related Resources

• Special Needs Trust Services - Complete SNT planning for California families
• Medi-Cal Planning - Protect benefits while planning for care
• Limited Conservatorship - For adults with developmental disabilities turning 18
• Guardianship Services - Protecting minors with special needs

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The Law Offices of Rozsa Gyene provides specialized Special Needs Trust planning for families served by the Tri-Counties Regional Center. We understand the specific policies and procedures that affect your loved one's benefits.

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