Skip to Content

We are a Veteran Owned Business, providing 20% discounts for Veterans, First Responders, Elementary and High School teachers. Please contact us to set up a phone or Zoom meeting. Taking care of you and your family, It's What We Do!

Explaining Special Needs Trust and Inheritance Tax

Posted on Tue Oct 27, 2015, on Special Needs Trust

From our “Ask a Question” mailbag: I want to form a Special Needs Trust for my daughter in my will, to be funded at my death. Will the money I put into the Special Needs Trust be subject to the Pennsylvania Inheritance Tax? Please explain special needs trust and inheritance tax?

Most Recently updated June 30, 2018.

Explaining special needs trust and inheritance tax.

Explaining Special Needs Trust and Inheritance Tax:

The Pennsylvania Inheritance Tax rate for transfers to children is 4.5%. This tax is payable whether you give the child money outright or if you place the money in a trust. A Special Needs Trust is an Irrevocable Trust that has the added language allowing the money to be available for a Special Needs Person’s care but still allows that person to qualify for Medicaid.

Though the purpose of the Trust is a noble one, the tax must still be paid. Please contact me if you would like to talk about other techniques that can avoid the Inheritance Tax, such as forming an Irrevocable Trust during your lifetime or an Irrevocable Life Insurance Trust. These trusts are not for everyone, but they do avoid the Pennsylvania Inheritance Tax if designed and funded correctly.

More Planning Questions?

The Special Needs Trust is only a piece of the Estate Planning process. By all means, if you want to learn more, please read my more detailed article, Estate Planning Everything You Need to Know.

In Conclusion: Explain special needs trust and inheritance tax

I hope that this article was helpful. My hope was to explain special needs trust and inheritance tax. Further, I included links to even more detailed information on my website so you can learn more. Therefore, please contact me and let me know how I did. Certainly, your comments and questions are welcome!

Let our Estate Planning lawyers help walk you through what can be a confusing process. To begin with, call to speak to one of our experienced estate planning lawyers.  By all means, our lawyers are ready to answer your questions. In fact, feel free to contact our office for a free consultation. Ultimately our goal is to make the process as painless as possible!

Wills, Trusts, Probate, and Estate Litigation, It’s All We Do!

 

Tags:

Special Needs, Special Needs Estate Planning, Special Needs Planning Attorney, Special Needs Trust

Peter KlenkPeter Klenk

What Our clients are saying

Klenk Law Logo
Stars

A Google User

Peter is a model attorney who puts his clients first at all costs. His extensive expertise in estate planning and tax planning was a great comfort as we began, and have expanded, our family. He is very thoughtful, generous, and quick witted. His approach towards his business has been an inspiration to his peer group, and his zest for life is extremely infectious. Without reservation, I highly recommend Peter as trusted and cherished counsel

Klenk Law Logo
Stars

Albert A.

You & your staff are the best thank you for everything.

Klenk Law Logo
Stars

Kevin K.

I was referred to Peter after my divorce to put documents together to protect my assets. He suggested a number of documents that would help protect my children and their future. Also, he put together wills, power of attorney and living wills. I initially spoke with him on the phone, he took 30-40 minutes to understand my situation and explain the benefits of having such documents. After a week or two, I met with him in his office and signed the documents. Everything else was remote phone calls and emails. He re-explained these documents and what whom to share. I am in good hands.

Klenk Law Logo
Stars

D.P.

Like another reviewer, I contacted Peter through his website using the free consultation link, for a question regarding PA inheritance taxes. The question was quite technical and difficult to explain, and the answer was nowhere to be found on the web. Peter grasped precisely what I was asking, and provided a clear, helpful response (with a touch of humor) the very next day.

Klenk Law Logo
Stars

Rachel Roney

Peter has done a great job with the estate planning for my father. He is very thorough and patient as we, the family need to make decisions.

Let us put our expertise to work for you.

Free consultation within 24 hours.