Does anyone have experience with a Special Needs Trust?

For multiple reasons, this is a good idea. Talk to an elder attorney.

Thanks for the answers and ideas. I've always lived in community property states and it's not hard to keep your separate property, like an inheritance, separate. Don't mingle those funds with a thing that is community. Keep a separate bank account that is funded clearly with only separate funds. There are no kids to worry about in this mix. I will be consulting our attorney when the funds are actually in the horizon.

I n California I think those funds would become community property and subject to the asset limitations under Medicaid (should your husbnd need it) Also, the "at-home" spouse is only allowed a little over $100,000 in total assets (I think this excludes home and 1 car).
Since this probbly would exclude him from Medicaid until he is down to $3000 - I would look into a long term health policy - they sure aren't cheap and watch all terms carefully - some are for 3 yrs some 5 years ,etc. some pay "in-home"
Also, in California there is something about a life insurance policy which you buy a lump sum and if his health care needs go over that state picks up cost.
Best bet to find estate lawyer who can explain your options.

If you are trying to save that money for husband (and keep kids out of it until after he is gone) a Revocable Living Trust stating how you want the money to be used (if you are not alive or incpicitated) would be a great option.Also, this type of trust is in my opinion a necessity - if one of you becomes incapcitated the other can act on their behalf (both of you need to be the trustees of the trust)
With just a will you would have to go to court and get guardianship (will only comes into play when person dies).
This trust if drawn up correctly also keeps family squabbles over care (and money spent for it) out of the picture.
While he is mentally/physically able - now is the time to take care of this.

When I looked into it about 5 years ago, the minimum investment was $100k. The beneficiary receives only the profits from the invested distributions through a third party and designates their choice of beneficiary upon their death. Once it is set up, you have no access to the fund, benefits, or assets upon the death of the beneficiary,

I haven't heard of a Special Needs Trust in this type of situation. I have a Special Needs Trust, but it is for my son who has Down Syndrome. It will provide for him when I am gone. Because he is disabled, MERP would not be able to recover any monies from my estate. This doesn't sound like what you will need, so I would definitely contact an Elder Law Attorney in your area. I know my mom could not get on Medicaid until she and my dad had less than about $13,000 in assets, not including their house and one vehicle. Unfortunately, the annuity they had was included as an asset for my mom even though it was in my dad's name. Please get legal advice.

You can arrange your sale of the house to be given to as needed. Go to amazonand buy Nolo's book of Special Needs, and hire an attorney to write up a trust to cover your husband.

Keep your assets separate. When you come in to this money, see a good financial advisor on how to invest it. You could discuss a long-term care policy or an annuity. Many options.