It may come as a surprise, but sometimes, including a loved one in your will can help them more than it can hurt them. This may be true when it comes to special needs family members. If you leave assets to a family member with special needs, they may be disqualified from government benefits that they need to survive. It is important to plan carefully to ensure that this does not occur. Read on to learn more about special needs trusts in Pennsylvania.
Who Can Have a Special Needs Trust?
When it comes to special needs trusts in Pennsylvania, the beneficiary must be under the age of 65 when the trust is created. In addition to this, property or assets cannot be added to the trust after their 65th birthday. The trust beneficiary cannot owe more than $2000 in assets in order to to avoid losing their right to Supplemental Security Income (SSI). The following assets can be placed in a special needs trust to preserve access to the proper assistance:
- Inherited property or assets
- Money received from a life insurance policy
- Assets from a divorce settlement
- Compensation from a settlement or lawsuit
Different Types of Special Needs Trusts in Pennsylvania
In the state of Pennsylvania, there are three main types of special needs trusts that can be created for a loved one:
- Self-Funded Special Needs Trusts: This trust must be created by a parent, grandparent, legal guardian, or court in order to receive and hold assets that belong to the disabled individual who receives the trust. This should direct the trustee to use trust funds to supplement the public benefits of the beneficiary.
- Third-Party Special Needs Trusts: This trust can be created by someone else for a beneficiary. This trust can be made during an individual’s lifetime or in the event of a death, as they are usually funded by life insurance. Other relatives such as grandparents, siblings, aunts, uncles, and friends can make gifts to this trust.
- Pooled Special Needs Trusts: This trust takes assets from several people and puts them together in a “pool” to create a larger investment fund for the disabled beneficiary. It requires the establishment of a disability and the need for the trust to be developed through a nonprofit organization.
If you have any questions or concerns about creating a special needs trust in Pennsylvania, contact our firm today.
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Friedman Schuman is an experienced and dedicated legal resource for clients throughout Pennsylvania. We proudly serve clients facing a wide range of legal matters. If you require the services of an effective attorney, please contact Friedman Schuman today to schedule a consultation.