Answering Common Questions About Special Needs Trusts
At Family Legal Center, LLC, we often get questions from clients about special needs trusts when they come in to talk about creating an estate plan. We wanted to take a few moments to address some of these questions here on our website for our Pennsylvania clients.
We invite you to reach out to us to learn more about your specific needs. Please call 412-843-0957 or send us an email to schedule a consultation at our Monroeville office or at a location convenient for you.
Can my loved one still receive government benefits with a special needs trust?
Yes. This is, in most cases, the primary reason that people decide to create a special needs trust. These trusts allow parents, grandparents or other family members to set aside assets that can be used for a loved one’s care without impacting the individual’s ability to receive benefits like Supplemental Security Income (SSI.)
It is important to set up a special needs trust properly because missteps could potentially threaten a loved one’s ability to receive these benefits. Knowing the best way to take advantage of the opportunities provided by the special needs trust is an essential part of your comprehensive estate plan.
What requirements must be met in order to set up a special needs trust?
The beneficiary of the trust must be someone who has a disability. The trust must be established before the beneficiary turns 65 years old. Assets cannot be transferred to the trust after the beneficiary turns 65. Other steps must be followed to be sure that the beneficiary does not rise above the $2,000 limit on assets that the beneficiary may own, or it may disqualify the beneficiary from receiving government benefits.
What can the trust assets be used for?
There are specific rules in place that state what the assets of a special needs trust can be used for on the beneficiary’s behalf. For the most part, the funds must be used for “quality of life” type purchases. That is, the trust cannot be used by the beneficiary to buy a home or pay rent, but rather to make modifications to the residence to make it easier for them to live with a disability. This may mean something like putting a chair lift in place if a person is unable to climb up the stairs, or other types of accessibility renovations.