[Pennsylvania retirees often make
legal and estate planning mistakes because of a lack of accurate information
and guidance. These mistakes can impact the retirees’ financial security and
prevent them from achieving important goals.]
The existence of a child, grandchild, or other potential beneficiary
with a disability (often referred to as “special needs”) complicates the estate
planning of a parent or grandparent.
Proper planning of your will, trusts, and beneficiary designations
becomes even more crucial to protecting your heirs.
(1) Making
outright distributions from a will, trust, insurance policy, annuity, or retirement
plan to the special needs individual.
The receipt of this kind of outright inheritance will likely make the
beneficiary ineligible for continued SSI and Medicaid benefits;
(4)
Establishing a “support trust” for a special needs beneficiary - which may
force the trust’s funds to be spent down before public benefits become
available.
There are much better ways to plan. One effectibe planning tool is the
“Special Needs Trust” which can be created to take effect either during your
lifetime or upon your death. A Special
Needs Trust can provide for the beneficiary’s continuing eligibility for
government benefits, protect the inheritance from claims for government
reimbursement, and protect the inheritance from loss to third parties, including
siblings, grandparents, aunts, uncles and friends who may have the best of
intentions.