Care and legal support throughout your journey

In Pennsylvania, a trust can be established to provide for the care of minors.

• Testamentary Trust: A common approach is to create a testamentary trust within a will. In the will, you can designate a trustee who will be responsible for managing and distributing assets for the benefit of the minors. This trust becomes effective upon your passing and can provide for the ongoing financial support of the minors until they reach a specified age or milestone.
• Trustee Selection: It’s crucial to select a trustee who is trustworthy, capable, and willing to fulfill the role. This person will have the responsibility to manage the assets in the trust and make decisions in the best interest of the minors. Consider choosing someone who has financial acumen and is capable of handling the ongoing administration of the trust.
• Specify Trust Terms: The terms of the trust should clearly outline how the assets are to be used for the care of the minors. This may include provisions for education, healthcare, housing, and other essential needs. You can also specify the age or circumstances under which the minors will receive full control of the trust assets.
• Consider a Trust Protector: A trust protector can be appointed to oversee the trustee’s actions and ensure they act in accordance with the trust terms. This additional layer of oversight can provide added protection and peace of mind
• Funding the Trust: To ensure the trust has assets to support the minors, you can transfer assets into the trust during your lifetime or through the terms of your will. It’s important to work with an attorney to properly structure the funding of the trust and ensure that it aligns with your estate planning goals.
• Regular Review and Updates: Life circumstances and the needs of the minors may change over time. It’s important to review and update the trust periodically to ensure it remains relevant and effective in meeting the needs of the minors.

Consulting with an estate planning attorney in Pennsylvania is crucial to establish a trust that aligns with your specific goals and meets the requirements of state law. They can guide you through the process and help create a comprehensive plan to care for the minors in your life.

The decision of whether to put your assets in an irrevocable trust or engage in a spend down for Medicaid planning depends on various factors, including your specific financial situation, goals, and the Medicaid rules in your jurisdiction. Here are some considerations for each option:

• Irrevocable Trust: Placing assets in an irrevocable trust can provide certain advantages for Medicaid planning. By transferring assets into the trust, you may be able to protect them from Medicaid eligibility requirements while still potentially receiving income generated by those assets. However, it’s important to note that there may be a look-back period during which transfers into the trust could be subject to Medicaid penalties.
• Spend Down: A spend down strategy involves reducing your assets to meet Medicaid eligibility thresholds. You would spend or reposition assets in a way that is compliant with Medicaid rules. This could include paying for medical expenses, outstanding debts, home modifications, or purchasing exempt assets. It’s crucial to ensure that your spend down activities are done well in advance of applying for Medicaid, as certain transfers or expenditures could be subject to penalties or delays in eligibility.

Ultimately, the decision between an irrevocable trust and spend down should be made in consultation with an experienced elder law attorney or a Medicaid planning professional. They can assess your specific situation, explain the implications and risks associated with each option, and guide you toward the most appropriate strategy. They will consider factors such as your asset profile, timeline, long-term care needs, and other goals to help you make an informed decision that aligns with your individual circumstances.