You have a child who is growing up with a life-long disability. Right now, you provide all of the care and assistance that they need. But you also understand that your child is relatively dependent on you.
As such, you want to plan for the future. Maybe you are making your estate plan and you’re considering putting financial assets in a trust. This way, the money is available for your child, even long after you pass away. It can help them with the financial hurdles they’re going to face based on their disability.
However, they also qualify for SSI benefits. If you give them this money in a trust, would that disqualify them from the benefits? Would you accidentally be doing more harm than good?
Adhering to the rules
In some cases, leaving a substantial amount of assets to someone can cause them to lose their government benefits. But there are rules regarding how the money can be used and distributed. If you follow them, you can still create the trust without risking those benefits.
Often, the rules just involve how the money is used. For instance, your child may be prohibited from paying for housing or food with the money from the trust if they are getting SSI benefits that should cover these costs. However, they may be able to receive withdrawals from the trust that are used for expenses that their SSI benefits do not cover. This could include something like going on vacation, purchasing a cellphone or paying for a type of therapy that isn’t covered medically. In general, it’s important to make sure that the funds are never given directly to the beneficiary, though, so that they cannot be considered income.
Every situation is unique. From your child’s condition to the type of trust you create, the details are specific to your situation. The key is for you and your family to carefully consider the legal steps you can take to create a positive future for your child. It may help to work with an experienced law firm at this time.