From the Offices of PLAN of PA.

From the Executive Director

 

PLAN of Pennsylvania is a national nonprofit organization established in 1989 by a group of parents of children with disabilities to provide an effective and affordable administration of a Special Needs Trust and act as the trustee in managing the disbursements. We recommend Purposeful Planning early with the five steps:

1. Understand the Need for a Trust A Special Needs Trust allows the parent or caregiver to set aside money for the future care of their loved one living with a disability while protecting the U.S. government benefits (Supplemental Security Income, Medicaid & Medicaid Waivers) that are crucial in providing the medical and income necessary to supporting the individual. In order to qualify for these benefits, the individual can have no more than $2,000 in liquid assets. A monetary gift, settlement, or inheritance will cancel these benefits, leaving the individual with both the need to manage the money themselves and, most likely, not have enough money to support their lifetime needs. To get started: Consider what those lifetime needs may be by filling out the MetLife Special Needs calculator.

2. Pick the Type of Trust That’s Right for Your Child: Your choice of trust will be determined by who’s putting the money into it — you or your child. Special Needs Trusts, are funded by a third party, usually a close family member like a parent or grandparent, and can be coordinated with the family’s estate plan. The trust holds money or property that the grantor leaves for the beneficiary’s benefit. Pooled Disability Trusts, on the other hand, are self-funded by the person with a disability, generally through a personal injury award or inheritance and can be used for the same types of expenditures. The pooled trust program must be set up and managed by a nonprofit corporation and must be established within the same month the funds were received to protect benefits. Unlike the Special Needs Trust, where the state does not need to be reimbursed if the beneficiary should pass away, the Pooled Disability Trust is required to pay back what it can to Medicaid. The grantor can designate an individual or organization to receive the remaining funds. Money in both types of trust can be used for things like purchasing a wheelchair, dental services, eye glasses, hearing aids, education, recreation and travel, transportation, furniture and clothing.  To get started: Read more about Special Needs Trust Administration at www.planofpa.org

3. Get Professional Help. Estate planning attorneys, financial planners, and case managers can give their perspective on long-term financial needs that will best suit the ‘what if’ scenarios. Because the regulations are complex and constantly changing, it’s important to select an attorney or nonprofit that specializes in these types of trusts. To get started: contact PLAN of PA (who can administer the trusts and serve as the trustee) and the Special Needs Alliance (who can connect you with an Estate Planning Attorney).

4. Choose a Trustee. Both trusts require that a trustee be designated. The trustee manages and invests the funds for the trust and makes disbursements that are for the sole benefit of the beneficiary. The trustee is also responsible for reporting to the government agencies providing the benefits and staying abreast of changing regulations. To get started: Consult a worksheet on selecting a trustee.

5. Choose an Advocate. Especially in the case of a Special Needs Trust, an advocate is designated by the grantor (individuals funding trust) and is generally someone close to the beneficiary who understands the grantors wishes and the beneficiary’s needs. The advocate works closely with the trustee in determining disbursements that will maintain quality of life for the beneficiary. The grantor should complete a set of instructions (forms are available to assist in this) indicating how they want the beneficiary to be cared for including the naming of the advocate. To get started: write a Letter of Intent to ensure that those making decisions for your child have the information they need.