We frequently prepare special needs trusts for clients in Pennsylvania. The special needs trust is most frequently used by parents who want to leave assets to a disabled or special needs child, but want the child to continue to receive Medicaid, Social Security and any other government or private benefits. The special needs trust allows inherited assets to benefit
Douglas L. Kaune, Esq.
the trust beneficiary at the sole and absolute discretion of the trustee thus enabling the child to continue to receive the deserved benefits.
In the Elder Law setting we use the special needs trust when a client wants to benefit an elderly individual who is either receiving or might need long term nursing home care in the not too distant future. The most common situation actually involves gifts from one spouse to another. Where one spouse holds significant assets in their own name and wants the assets to benefit their spouse if they die first, a special needs trust provides an excellent option. The client can designate all assets, whether through their will or through beneficiary designation, to be paid to a special needs trust created under their will or separately. Upon the death of the first spouse, the assets placed in trust can be paid to the surviving spouse at the sole discretion of the trustee. Should the surviving spouse need long term nursing care in the future, the assets in the special needs trusts, assuming all other legal ownership requirements are met, will be protected from the Medicaid asset spend down. The surviving spouse could therefore qualify for Medicaid much earlier, the trust assets are there if needed and the remainder goes to the children not to the nursing home or to Pennsylvania.
The special needs trust in the Elder Law setting provides comfort to the caregiver spouse that they are not disinheriting their spouse while also knowing that they are protecting the assets for their children. Careful consideration must be given to who will act as the trustee of the trust as that is the person who will be left to handle all of the investment and distribution decisions until the death of the second spouse. Additionally, the trust has to be drafted very carefully to qualify as a special needs trust.
You can contact Douglas L. Kaune at dkaune@utbf.com or 610 933 8069 to discuss your Pennsylvania Elder Law planning including the preparation of special needs trusts, wills, powers of attorney, health care directives and related Medicaid and nursing home asset protection concerns. Mr. Kaune’s practice is located in suburban Philadelphia having offices in Phoenixville, Malvern and West Chester. He services many surrounding towns and municiapalities including, but not limited to King of Prussia, Collegeville, Paoli, Wayne, Devon, Newtown Square, Exton and Royersford.
