Parents and other family members of individuals in Pennsylvania who receive Medicaid and Supplemental Security Income because of a disability may want to create a special needs trust as part of their estate plan. Having assets above a certain amount can result in disqualification for these benefits.
The type of trust needed depends on who is funding it. A regular special needs trust established by a family member does not require repayment to the state if the individual with special needs dies. However, there may be cases in which the individual receives a large sum of money through an inheritance or a lawsuit. This could be placed in what is known as a pooled disability trust. These types of trusts, established by the person with special needs, must pay back Medicaid after the person’s death. If any funds are remaining, they can go to a beneficiary. Both types of trusts can be used for a variety of expenses, including a wheelchair, clothing, vacations and more.
A trustee must be appointed to manage the trust. An advocate who understands the needs of the beneficiary, as well as the trust creator’s wishes, may also be helpful. People who are considering creating a special needs trust might want to work with a professional since the regulations may change and the setup may be complex.
Working with an attorney on other elements of estate planning might prevent additional errors as well. Confusing or incorrect legal language in a document can lead to misunderstandings or even cause it to be declared invalid. An attorney might able to assist with other elements of creating an estate plan. For example, people may also want to consider what they want to put in place in case of becoming incapacitated. Powers of attorney can appoint people to handle medical and financial issues.
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