A person with special needs has it tougher than most getting through life’s trials and tribulations. Disabilities can prevent a person from earning a living wage, and often go so far as to require assistance with the most basic activities of daily life. So, not only do the disabled have a disadvantage in earning income, many are straddled with additional expenses just to get through the day. It’s not fair, but it is a reality in life that some are born with or develop at some point during their lifetime.
The good people of our country have recognized that disabled people with special needs must have help. The government has developed tax-funded programs to assist the disabled with their financial needs. However, these programs have issues. The number one issue is that a surprising little amount is afforded and that one must be virtually broke to qualify to receive assistance. People with special needs actually need to fall at or near the poverty line to qualify. Because of this, it makes it difficult to help a disabled person out financially. In many cases, even a small amount of financial assistance can cause disqualification of benefits.
This situation can be really problematic when it comes to wanting to leave an inheritance to a beneficiary that receives government benefits. In most cases, the amount of inheritance will cause the beneficiary to exceed the minimum financial limitations to receive benefits. The beneficiary will be disqualified from benefits and will have to use the money received from the inheritance to survive. It won’t be until almost the entire inheritance is spent before the beneficiary can reapply for government assistance. The whole point of leaving an inheritance to someone you care for is to help that person have a good life. But, in this situation, a special needs beneficiary is basically forced out of their inheritance and opportunity for a better life. Isn’t that terrible? Again, it’s not fair, but it is the way it works, and better than nothing.
Supplemental Security Income (SSI)
Government assistance for special needs is found through programs known as Medicaid, Medi-Cal, and Supplemental Security Income (SSI). To qualify, a person can usually have a home, a variety of personal items, and one motor vehicle, but is only allowed to keep up to $2,000 in cash. For this, the recipient will receive income for basic needs to help cover the cost of housing, food, clothing, and medical care. In order to maintain benefits, the recipient must remain at or below the $2,000 cash limit. Therefore, a recipient should never be given cash or a cash equivalent for life’s necessities, such as food or shelter, as those gifts can disqualify benefits. However, there are things that can be provided above and beyond necessities, which will not cause a disqualification. Some of these things are:-
- Education
- Special Medical Equipment (Wheelchairs)
- Travel
- Entertainment
- Computers and Appliances
- Vehicles
- Public Transportation
- Vacations
Special Needs Trust
Many people want to leave an inheritance to continue to provide for the well-being of their loved ones. However, in doing so, the inheritance would put assets in the hands of the special needs beneficiary causing disqualification of benefits. Fortunately, a trust has been developed to continue financial support without being recognized as an asset. The sole purpose of the trust is to provide payments to cover expenses beyond the necessities provided through the government programs. It’s commonly known as a Special Needs Trust, and since the beneficiary does not own the assets of the trust, government benefits are not affected. The special needs trust can continue to provide support for the life of the beneficiary, and eventually be passed on to subsequent beneficiaries (decedents) when that time comes.Protecting Special Needs Beneficiaries Through Living Trusts
Since money and assets cannot be given to a special needs beneficiary, inheritance must be allocated directly into a special needs trust. It is for this reason that a family living trust becomes a necessity. A living trust can be designed by an attorney setting forth instructions to create and fund a special needs trust for the benefit of the beneficiary. In doing so, disqualification of benefits is avoided and the beneficiary will receive continued financial support from the inheritance as it is passed through the special needs trust.National Association of Family Services
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This area of the website is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of the author, not of the National Association of Family Services, and have not been evaluated by the National Association of Family Services for accuracy, completeness, or changes in the law.
