Some readers from Pennsylvania may be interested in establishing a special needs trust for their children. Special needs trusts are intended to allow a disabled child to supplement their government benefits, such as Medicaid and Supplemental Security Income, while still providing for a child's financial future. Through a properly established special needs trust, a child can benefit from the trust's assets without losing eligibility for these government benefits.
The appointed trustee of a special needs trust cannot appropriate the funds toward things such as housing, property taxes, home insurance and other such matters that are subject to government aid. Rather, a special needs trust supplements that which is not typically afforded by government assistance. A special needs trust can cover things such as some dental procedures, education, transportation and more.
A trust such as this can be funded through some government benefits, life insurance policies and inheritances. In some cases, military benefits and some forms of property can be utilized. There are important considerations to bear in mind when using a special needs trust. A child may become ineligible for government benefits if he or she owns assets worth more than $2,000. Accordingly, inheritances and transfers of money must be made in the name of the trust itself rather than the child.
If someone is interested in establishing a special needs trust, they may wish to consult their options with an attorney. Since designating a trustee can be one of the most important tasks before the trust can be established, an attorney may be able to help designate the responsibilities of the trustee in question and define the limitations of their authority. In addition, an attorney may be able to help set up the trust so as to ensure the child's continued eligibility for government benefits.
Source: Pacer.org, "The Special Needs Trust", October 12, 2014