From our “Ask a Question” Mailbag: Philadelphia Special Needs Trusts

Most Recently Updated July 16, 2018.

“My son is a special needs child in Philadelphia on Medicaid, and I want to leave money at my death for his care. I have heard that Special Needs Trusts are becoming more liberal, is that true?”

Philadelphia Special Needs Trusts

Philadelphia Special Needs Trusts

Special Needs Trusts have been available for many years, allowing parents to leave money for a child’s care that “supplements” but does not “supplant” what government programs provide. In this way, your child can qualify for Medicaid but the trustee can use the money you set aside for your son to provide him with the extra things that the government program does not provide.

Initially, the statute was interpreted to require that if the child was eligible for a government program, the trustee was prohibited from using the Special Needs Trust funds to provide whatever that program provided. Rightfully so, parents were concerned that if the government program was sub-par, the child was stuck with the program.

Special Needs Trusts are Evolving

Like most things, Special Needs Trusts are evolving and being reinterpreted. Currently, it has become acceptable to add language to a trust that allows the trustee to make distributions to the Special Needs person that will reduce or eliminate government benefits if the trustee determines that

1. The Beneficiary’s needs will be better met, and
2. It is in the Beneficiary’s best interest to suffer the loss of government benefits.

To further protect the Special Needs person, we can also add language so that if the rules shift back the other way and the mere existence of this power results in the loss of government benefits then the power is void. This change gives the Trustee more flexibility to react to future events, and gives parents more peace of mind.

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: Philadelphia Special Needs Trusts

I hope that this article was helpful in explaining a special needs trust. 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!

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