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Planning for a Disabled Heir

Estate planning attorney helping family plan for disabled heirGood estate planning makes sure you have effectively planned for any disabled beneficiaries. For a number of reasons, you may not want your estate to be distributed to a disabled loved one. One reason is that any inheritance may make him or her ineligible for public benefits.

The solution to this may be to create a "special needs trust" for his or her benefit.

A number of factors control whether a disabled individual can qualify to receive government benefits. Depending on the work history and other factors, a disabled individual may receive Supplemental Security Income (SSI). This program helps the indigent disabled have a minimum standard of living and also provides free healthcare in Florida through the Medicaid program. SSI typically provides a monthly stipend of $698/month to the disabled individual.

In order to be eligible for SSI, you must be considered disabled under a relatively strict set of guidelines. If a disability is present, you must also be indigent and own less than $2,000 in countable assets. There are many other requirements for SSI, but these are the two main qualifiers.

Therefore, if you intend to leave money to support a disabled loved one, you should do so in the form of a special needs trust. If you were to distribute a gift or bequest to that individual outright, then that could make them ineligible for SSI as their assets would exceed the $2,000 limit. Thus, your loved one would be ineligible for SSI (and Medicaid) until the inheritance has been exhausted.

With a special needs trust, you create a trust for the beneficiary's support that will not interfere with their necessary government benefits. The special needs trustee can make a number of distributions to the beneficiary under very strict rules, basically providing for a better lifestyle than the minimum government standards. The special needs trustee can pay for travel, entertainment, and an assortment of other expenses. The main object of this type of trust is to allow for a better standard of living and a higher level of medical care than what government benefits alone provide.

Please let us know if you have an intended beneficiary who is receiving government disability. We will be glad to sit down, review your goals and wishes and create a good estate plan that works for you and your disabled family member.

D. Rep DeLoach III
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Estate Planning and Board Certified Elder Law Attorney
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