California Department of Health Care Services:
There are two common types of special needs trusts: first-party trusts and third-party funded trusts. A first-party trust requires the assets to come from the beneficiary. These trusts must include federal and state provisions, which require notice and payback to the State upon the death of the trust beneficiary or earlier termination of the trust. The California Department of Health Care Services (DHCS) is required to recover up to an amount equal to the total medical assistance paid by Medi-Cal on the trust beneficiary’s behalf. First-party SNTs are classified as either a (d)(4)(A) SNT or a pooled SNT. Third-party SNTs are funded with assets belonging to a person other than the trust beneficiary. Third-party trusts are not subject to recovery by DHCS.
At trust establishment, the trustee is required to notify DHCS at least 15 days prior to the hearing pursuant to Probate Code Sections 3600-3605 and 3610-3613.