The Attorneys Of Stewart Sorice Farrell Finoli And Cavanaugh LLC

Estate planning may require a special needs trust

On Behalf of | Jan 9, 2020 | Estate Planning |

A Pennsylvania family’s estate planning preparations may require careful consideration for an adult child with a physical or mental disability. When an individual relies upon public assistance programs such as Social Security Supplemental Income and Medicaid, an inheritance may affect his or her eligibility to receive continued benefits.

To prevent the loss of this financial assistance, parents may set up a special needs trust to ensure that an adult child receives all the care and financial support he or she requires. As noted by Forbes magazine, setting up a special needs trust may provide a beneficiary with funds for personal expenses such as medical treatment, travel and pet care.

Additional benefits of a special needs trust

A trust enables an individual with special needs to receive continued and adequately supervised support through a named trustee after his or her parents have passed away. The specified trustee oversees the distribution and allocation of the trust’s funds and ensures that a beneficiary’s special needs receive full attention.

A special needs trust also enables a family to preserve wealth. A dependent individual may not have the capability of managing his or her own finances. With a sudden loss of a parent, the monies received may require the trustee’s oversight to ensure the best possible usage.

Helping a disabled beneficiary maintain quality of life

Assets transferred to a special needs trust typically include cash and property intended to provide care and support for an adult who cannot manage on his or her own. The language of the trust may contain specific instructions that a trustee must follow in carrying out the duties of care.

A trustee’s instructions may include maintaining a beneficiary’s living arrangements, managing his or her public assistance benefits and preserving an inheritance. Creating a trust may also include drawing up supporting documentation, such as a power of attorney. This will help to ensure that after the parents pass away, someone remains available to help maintain the intended and deserved quality of life for a special needs beneficiary.