The Attorneys Of Stewart Sorice Farrell Finoli And Cavanaugh LLC

How can having a special needs trust help me?

On Behalf of | Jul 26, 2021 | Estate Planning |

Many people in Pennsylvania plan on applying for Medicaid or other government benefits to help supplement their income during their senior years. However, these benefits are generally only available to those with a low income and few assets. Does this mean that a person must impoverish themselves to qualify for benefits? Not necessarily if you have a special needs trust.

What is a special needs trust used for?

A special needs trust permits a physically or mentally disabled person or a person with a chronic illness to receive an income that will not count towards Medicaid eligibility. It is a fiduciary arrangement in which another person acts on behalf of you to manage your assets. Normally, you must have a minimal amount of income and assets to qualify for Medicaid. The money placed in a special needs trust does not qualify for the purposes of obtaining Medicaid and other government benefits.

What can special needs trusts cover?

A special needs trust sets aside a certain amount of a person’s finances in a trust. As long as these funds are not used for specific food or shelter needs the assets do not count for Medicaid eligibility purposes. The funds in a special needs trust can be used to cover medical expenses, caretaker expenses, transportation expenses and other expenses. A trustee has control over the funds in the trust and will be responsible for managing the trust and distributing trust funds. While the disabled individual’s funds placed in the trust may be subjected to the Medicaid look-back period, assets placed in the trust by another person are not.

Learn more about elder law

Special needs trusts have the benefit of providing the beneficiary with an income without affecting their eligibility for government benefits such as Medicaid. This post is for educational purposes only and does not contain legal advice. Our firm’s webpage on elder law may be a useful resource for those who want further information on this topic.