04/29/2022
Do you want to leave money or property to a loved one with Special Needs?
If your answer to this question is “Yes”, you must plan carefully. You could unintentionally jeopardize your loved one's ability to receive Supplemental Security Income (SSI) and Medicaid benefits if you are not careful. To avoid this problem, you can set up a "Supplemental Needs Trust" and help your loved one without causing them to lose the benefits that are currently helping with their needs.
There are certain assets, including cash in the bank, that will disqualify your loved one from benefits. For example, if you leave your loved one $7,500 in cash, that gift would disqualify them from receiving the governmental benefits they already are receiving from SSI and/or Medicaid.
Setting up a Supplemental Needs Trust Can Help!
If you would like to avoid your loved one losing eligibility for SSI or Medicaid, we can help you create what's called a Supplemental Needs Trust. When this is created, you can leave your assets to that Supplemental Needs Trust to avoid disqualifying your loved one from their benefits.
You would choose someone to serve as Trustee and they will have legal control over the trust property. You can draft terms of how they will be able to use those assets for the benefit of your loved one. Because your loved one will have no control over the property in the trust, SSI and Medicaid will not look at the trust property for purposes of program eligibility. You can have the trust terminate itself when it is no longer needed. Typically this is when the special needs child passes away.
Trust funds can be spent to supplement your loved one’s benefits.
The trustee cannot give money directly to your loved one. This would interfere with eligibility for SSI and Medicaid, but the trustee can spend trust assets to buy many different goods and services for your loved one. People will commonly use trust funds to pay for home furnishings, education, vehicles, recreation, personal care attendants, vacations, physical rehab, and out-of-pocket medical and dental expenses.
We will be glad to discuss any questions you may have about Supplemental Needs Trusts and be happy to draft one for you if you would like!
Please do not hesitate to contact me if you have any questions or concerns. I can be reached by email at [email protected] or by telephone at 334-303-2258. I will be happy to set up an appointment with you to help walk you through this very important process.
Reid G. Tolar
Attorney at Law
250 Winton M. Blount Loop
Montgomery, AL 36117
334-303-2258
[email protected]
