As a parent, you may worry about providing for your child with special needs who will never achieve financial independence. Fortunately, Pennsylvania has various options to ease your concerns.
These are among the most beneficial estate planning solutions to help protect your child’s future after you are gone.
Special needs trusts
Adult beneficiaries of funds in supplemental or special needs trusts can continue receiving essential government benefits like Medicaid, Supplemental Security Income and housing subsidies and avoid exceeding these programs’ qualifying income limits as beneficiaries of traditional wills. For example, you can establish an SNT naming a trustee who applies its funds toward additional medical expenses, education, vacations, furniture or anything government benefits do not cover but enhance your child’s quality of life.
Health care agents
An SNT trustee has the authority to apply funds toward your child’s medical expenses. Still, you need a separate health care agent to make medical decisions on behalf of an adult child unable to do so. A health care agent also has access to your child’s medical records. Consider naming a close friend or relative who can reliably represent your wishes, beliefs and standards to fill this role.
Achieving a Better Life Experience accounts
If your adult child is competent to make decisions and has a disability starting before age 26, you may select an Achieving a Better Life Experience account. Your child can directly contribute to, access and apply funds toward a broader range of expenses than SNTs allow. Also, unlike SNT funds, those in an ABLE account below $16,000 are exempt from yearly taxation. However, Medicaid may require repayment from leftover funds; something SNTs do not mandate.
It is never too soon to start planning for the future if your child has special needs.