A Special Needs Trust is designed to provide financial resources to assist a disabled individual who receive government funding. This prevents the department of Public Welfare from taking the money for reimbursement of funds (MA benefits) for the provision of MH/MR.
There are three types of special needs trusts:
Third Party Funded Special Need Trusts funded from someone else's money. The creator must state that the money is to be used to supplement public funding and not replace the public funding. The Trust is irrevocable. The trustee has discretion on the use of the funds.
Self Funded Special Need Trusts Must be created by the parent, grandparent, guardian or court. Discretion of the trustee. Irrevocable. For a disabled beneficiary. Balance is used to payback the state for Medical Assistance. Can't be created after an individual is 65
Pooled Trusts a non-profit fiduciary must be the trustee. Can be created by anyone. Residue remains in trust upon death of disabled beneficiary PA now requires a 50% payback.
Purchases from a Special Needs Trust are to be used to enhance the individuals quality of life. It must be for their benefit. One home, vehicle and a trip with a care giver are examples.
This information is based on Pennsylvania Rules. The guidelines in your state may differ. An attorney should be used by any person wishing to create a trust.
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