Children and adults with disabling medical conditions often require the support of others even when they are technically old enough to live independently.
Trusts serve as a way for parents and other family members to provide the resources that someone with special needs will require without necessarily stripping them of their eligibility for certain crucial Pennsylvania state and federal benefits. These are the primary kinds of trusts may families create on behalf of individuals with special needs.
1. A special needs trust
A special needs trust allows its sole beneficiary to have access to structured disbursements of the resources set aside for their use. One of the reasons people create special needs trusts is to help people qualify for medical assistance while they are under the age of 65. A well-funded and properly structured special needs trust can provide supplemental resources for someone for the rest of their life in many cases.
2. A third-party funded or supplemental needs trust
A third-party funded trust has resources that did not belong to the trust beneficiary but rather to a family member, friend or someone else who wanted to support them. The resources in the trust can then help provide supplemental support for the beneficiary until the resources run out or they die. This prevents medical assistance benefits from being interrupted by an inheritance.
3. A pooled trust
Sometimes, someone with special needs does not have resources to fund a trust and does not have family members or litigation proceeds either. Pooled trusts help those who do not have resources of their own. This form of trust is usually created and maintained by a nonprofit corporation. The organization pools all of the funds for various different trusts and invests them and then maintains separate accounts for each beneficiary. The system helps by allowing some of the remaining assets left after a beneficiary dies to go to other individuals who also have disabling medical conditions and insufficient resources to ensure their comfort.
Each of these trusts has a special purpose and can offer special forms of support to those with disabling medical conditions. Exploring every option for creating a trust for someone with special needs can better ensure their comfort and protection regardless of what happens to their family members.