Anyone in Pennsylvania who has a special needs child, no matter what their ages, knows that they must provide adequately for them once they pass away. Thankfully, you can create special needs trusts to take care of your disabled offspring.
What are Special Needs Trusts?
Creating special needs trusts for offspring who have disabilities that prevent them from working full or part-time is an integral part of estate planning. These trusts allow you to give your financial resources to a disabled child under the age of 65 who receives Medical Assistance (MA) or Supplemental Security Income (SSI). Most people who receive MA or SSI have less than $2,000 in personal assets. Any funds that a disabled person receives, whether from a divorce settlement, worker’s compensation, or another source of income, should be placed in a special needs trust so those funds remain available for the disabled person’s use.
Types of Special Needs Trusts and their needs
When you decide to create a Special Needs Trust for a disabled child, you have three different types that could work for your situation:
- Common-Law Special Needs Trust
- Payback Trust
- Pooled Trust
Decide on your own about which type of trust is most appropriate for your needs while also maximizing benefits for your disabled children. In most circumstances, you’ll be able to structure payments for your adult disabled child to keep them comfortable for the remainder of their lives.
Make sure that your legal professionals are aware of your wishes for your accumulated wealth. In some cases, you may need to combine special needs trusts with other types of tax-saving strategies to preserve wealth for children who won’t be able to support themselves. Make sure to explore all methods fully.