Philadelphia PA Estate Planning Blog

Tuesday, September 2, 2014

An Explanation of Special Needs Trusts

Are you planning on leaving part of all of your estate to a person with special needs? Particularly, the concern is that an individual with special needs that is receiving Medicaid or SSI benefits may become ineligible for those benefits upon receiving an inheritance. How can you avoid that from happening while still providing for him or her?

A Special Needs Trust is required to keep your loved one on his or her public benefits while still providing supplemental needs for them.

In Pennsylvania, it is a detriment to any person that receives public benefits (SSI, Medicaid, Medical Assistance / MA). Even if the person is not currently receiving benefits but you’re concerned they may receive public benefits in the future, you want to consider a special needs trust.

By carefully establishing a Special Needs Trust, you can select a Trustee who cares for your loved one, and provides for any supplemental needs through the trust funds. The Trustee makes sure that your loved one never actually touches the funds. This ensures that eligibility for public benefits will never be in jeopardy. The trust can 

There are several different types of Special Needs Trusts:

  • Third Party Special Needs Trust: If you establish a Special Needs Trust for the benefit of another person, this is called a Third Party Special Needs Trust. With these types of trusts, the Commonwealth of Pennsylvania nor the Federal Government are not entitled to recover any assets (“estate recovery”) when the individual with special needs passes.

  • First Party Special Needs Trust: Also referred to as a self-settled trust, an individual with special needs may put their own assets into this type of trust, protect their estate while living, and still qualify for public benefits. Often used for personal injury settlements, this trust must name the government as the primary beneficiary. This trust must be reviewed by the government before it may be activated. Individuals doing estate planning for their own estate on behalf of a loved one with special needs should utilize a Third Party Special Needs Trust.

 A Special Needs Trust is a specialized tool and provides many benefits. If you have a loved one on public benefits that you wish to provide for, we can assist you. The Law Offices of Jeremy A. Wechsler offers a complimentary estate plan review and consultation. Please call us today at (215) 706-0200 or email us.

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The Law Offices of Jeremy A. Wechsler assist clients with Estate Planning matters in Willow Grove, PA as well as Abington, Hatboro, Dresher, Horsham, Bryn Athyn, Huntingdon Valley, Fort Washington, Jenkintown, Glenside, Oreland, Warminister, Wyncote, Ambler, Elkins Park, Flourtown, Philadelphia, Warrington, Cheltenham, Gwynedd Valley, Jamison, Feasterville Trevose, Richboro, North Wales, Blue Bell, Lafayette Hill, King of Prussia, Collegeville, Oaks, Phoenixville, Oxford Valley, Langhorne, Penndel, Bristol, Fairless Hills, Bensalem, Plymouth Meeting, Furlong, Philadelphia County, Bucks County and Montgomery County.

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