Which type of investment is explicitly excluded from Special Care Trusts?

Special Care Trusts are specifically designed to provide for the long-term care needs of individuals without disqualifying them from public assistance programs. The purpose of these trusts is to protect resources while ensuring that the beneficiary still qualifies for programs like Medi-Cal.

Investments in mutual funds are explicitly excluded from Special Care Trusts because they can be seen as investments that increase the liquidity of the trust. Given that the goal of Special Care Trusts is to ensure the funds are used primarily for the care of the beneficiary, allowing investments that can easily be liquidated might undermine that goal. On the other hand, other types of investments, such as certificates of deposit, commercial bonds, and first trust deeds, tend to be more stable and provide a more predictable income or return, which aligns better with the objectives of long-term care funding.

In summary, the exclusion of mutual funds helps maintain the integrity and purpose of Special Care Trusts, which is to safeguard assets for a specific use related to the long-term care needs of the beneficiary.