What Is a Special Needs Trust?
A special needs trust is a trust document – or a right of property that is held by one party for the benefit of another – that is designed to provide a person with disabilities who is under the age of 65 with additional resources when they need them. Often, those with disabilities receive Medicaid or Supplemental Security Income (SSI), which are based on the recipient’s overall assets – and which must be fairly low in order to qualify for these services. A special needs trust can hold additional assets on the individual’s behalf if the assets would otherwise cause them to lose their benefits. Disability benefits are exceptionally challenging, and if you have questions or concerns about a special needs trust, the best course of action is to reach out to an experienced Pennsylvania estate and trust attorney.
When a Special Needs Trust Makes Sense
Generally, recipients of Medicaid or supplemental security income (SSI) can own very little in total assets in order to continue qualifying. When someone is already receiving benefits like these and their assets are about to increase, the matter needs to be addressed, or they risk losing services. Common occurrences that tend to support a special needs trust include all the following:
- They are about to inherit a significant amount.
- They are about to receive a gift of significant value.
- They are about to receive a lump sum settlement for workers’ compensation.
- They are about to receive life insurance proceeds.
- They are about to receive a divorce settlement.
- They are about to receive a personal injury settlement or court award.
In order to protect the individual’s newly acquired assets without losing the benefits they’re currently receiving, a special needs trust will need to be set up.
The Special Needs Trust
In order to implement a special needs trust on behalf of a disabled individual, the trust itself will need to be properly drafted and must be approved by all the following:
- The Social Security Administration office
- The court
- The Department of Public Welfare
The document must also name a trustee to manage the assets included. It’s important to note that there are specific restrictions in place regarding disbursements from these trusts, and an alternate beneficiary must be named – in the event of the original beneficiary’s death.
The Primary Categories of Special Needs Trusts
Special needs trusts come in three basic forms that include each of the following:
- Payback trusts
- Pooled trusts
- Common law special needs trusts
Every special needs trust is unique to the specific situation at hand, and your savvy estate planning attorney will ensure that you implement the kind of trust that best addresses your loved one’s needs.
Make the Call to an Experienced Pennsylvania Estate and Trust Attorney Today
If you need to set up a special needs trust, the dedicated estate and trust attorneys at Mette Attorneys at Law welcome the opportunity to harness the full force of their impressive experience and legal skill in this challenging area of the law on behalf of your loved one’s best interests. Learn more by contacting us online or calling us at 717-231-5219.