• What is Estate Planning?

Estate Planning provides for the planned distribution of your assets upon your death.  By planning ahead, you can reduce the impact of federal taxes on your estate leaving a larger pool of money for distribution to your family or intended beneficiaries.  An estate plan is your chance to benefit the people or organizations that are most important in your life. 

• What is a Will? 

A will is a written document with instructions for disposing of assets after death.  A will can only be enforced through the probate court.  A properly designed will should include arrangements for how to pay for your funeral, who should be named as your executor, what assets you have and who should be entitled to receive those assets.

 • What responsibilities would my Executor have? 

Executors of estates are charged with responsibilities such as paying funeral expenses, resolving legal issues surrounding the estate, distributing gifts in accordance with the provisions of your Will, and maintaining the property of the estate (such as safeguarding valuables, caring for the lawn or pets, and paying utility and other bills).

 • What is a Power of Attorney (POA)? 

A power of attorney is a document that gives a person, typically called the agent, power to make decisions on behalf of the person creating the power.  There are two types of powers of attorney:  a regular power of attorney and a durable power of attorney. 

A regular POA can be implemented giving the agent the power to make decisions for the person creating the power of attorney.  These decisions are usually financially related and involve the power to make cash decisions or to make financial decisions that are not cash related, such as real estate transactions.  A regular POA becomes ineffective if the person who grants the powers becomes incapacitated.

A durable POA remains in effect even if the person granting the power becomes physically or mentally incapacitated.  In such case, the person who becomes incapacitated will usually grant the agent the power to make financial and medical decisions.  The durable POA ends when the person granting the power dies. 

 • What is a Living Will? 

A Living Will is an instrument that provides for end-of-life decision, including whether or how life sustaining procedures are to be administered to a person.  In Pennsylvania, a Living Will can only substitute for a person's direct instructions if the person is declared incompetent and is either in a terminal condition or permanent state of unconsciousness.   A doctor must certify that a person is in this condition and obtain a second opinion as to those facts.  To be valid, a Living Will must specifically contain clear and convincing statement of the intention of the patient in regard to refusal of treatment. 

 • What is a Trust? 

A trust is a multifunctional instrument.  In general, a trust is a right of property, real or personal, held by one person for the benefit of another.  A trust authorizes a named Trustee to manage the trust property for the benefit of one or more individuals, or "beneficiaries."   

• What is a Special Needs Trust? 

A special needs trust is an instrument created to protect the assets of someone who is disabled and may be receiving public assistance.  Special Needs Trusts are designed to permit financial resources to remain available to assist a disabled individual who receives, or may receive in the future, MH/MR and/or Medical Assistance and/or SSI benefits.  They also protect such resources from immediate invasion by the Department of Public Welfare (or other providers of publicly-funded services) to reimburse the public treasury for the provision of MH/MR, MA or SSI benefits.   

• Does a Special Needs Trust qualify my disabled relative for public benefits? 

No. A special needs trust does not in itself make public benefits available,  nor does it make it easier to qualify for them.  The beneficiary must meet the qualifications for the benefits program – either before or after the Trust is established.  If properly designed, the Trust will not cause a loss of benefits – although the level of benefits may be reduced in some circumstances. 

 • Why would I want to place money in a Special Needs Trust just to qualify for government benefits? 

Many benefits are extremely expensive and financially draining when paid for privately.  Some services are only available through public funding.

 • Who should be in charge of the Trust? 

The combination of a family member and a professional (or corporate) trustee is often the best arrangement for administering the Trust.  Your disabled relative cannot serve as trustee.  The corporate trustee must be sensitive to the needs of the beneficiary and must be knowledgeable about government benefits and the administration of Special Needs Trusts. 

 • What can the Trust pay for? 

A Special Needs Trust can provide for physical therapy, medications and medical treatment and transportation.  It also may allow for other life-enhancing items, such as education, entertainment, vacations, companionship, furniture and furnishings (such as a television or computer), and some utilities (e.g., cable television and telephone service, but not electricity, gas or water).  The general rule is that a Trust may not provide the beneficiary with food, clothing or shelter (e.g., rent), or any asset which could be converted into food clothing or shelter – including cash.  If the Trust is structured to pay for food, clothing or shelter, the disabled person’s SSI payments will be reduced.  However, with proper Trust administration, the basic benefit as well as Medicaid eligibility can be preserved.  Direct distributions of cash to the beneficiary is almost never permitted.