Parents of special needs children in Hazelton realize that their future will look very different from their counterparts. They understand that their child will need their help, emotionally and financially for much of their adult lives. Parents of special needs children may wonder how they can afford their child’s care especially after they pass away. One way to do this is through a special needs trust.
What is a special needs trust?
A special needs trust is a type of trust that allows the special needs child (the beneficiary) to receive trust assets without jeopardizing the child’s eligibility for government benefits such as Medicaid and SNAP benefits. Some government benefits are “means tested” which basically means that a person must have limited income or assets to qualify for them. In a special needs trust, a third party — generally a relative or profession such as an accountant or an attorney — is granted the ability to provide the beneficiary with periodic disbursements from trust assets after the child’s parents pass away. These disbursements are not counted as income or assets for the purposes of determining eligibility for government benefits.
Types of special needs trusts
There are a variety of types of special needs trust meant to assist those in a variety of circumstances. They include:
- Third-party special needs trusts (also known as a family trust);
- First-party special needs trusts;
- Pooled trusts; and
- ABLE accounts.
With a variety of trusts to choose from, parents of special needs trusts can choose the option that is right for them and their child.
Special needs trusts are a great tool for parents in Pennsylvania who want to support their special needs child after they pass away through estate planning. These trusts can allow special needs children to receive the extra funds they need to live comfortably without sacrificing their eligibility for government benefits.