If your adult child receives Supplemental Security Income (SSI) due to a disability, you’re likely aware of exactly how important those benefits are — particularly the associated health benefits. You don’t want to do anything to endanger those, now or in the future.
That makes it important to understand exactly what you need to do to create a workable trust for your child once you are gone.
Part of the task is making sure that you set the trust up within Social Security’s guidelines so that its mere existence doesn’t cost your child his or her financial or medical benefits. The second part of the task is making sure that the person in charge of the trust understands what can and cannot be done with the trust.
For example, if the trust is used to make any cash payments to your child, that will count as income — which could then, at least temporarily, affect your child’s entitlement to benefits through SSI and Medicaid. If the trust is used to pay your child’s rent and utilities, that will likely be considered in-kind income that will reduce your child’s benefit check by a third. Neither of those is a desirable outcome.
On the other hand, the money in the trust can be used to pay for a number of things that can make your child’s life more comfortable or enriched. For example, it can be used to pay for house cleaning services, furniture, electronics and other nonessential items. It could also be used to pay for any medical expenses that aren’t necessarily covered by Medicaid — like experimental therapies or treatment.
When you have a child with special needs, you need to have a comprehensive plan for the future — and that means making sure that everyone understands the rules. For more information, talk to an attorney with experience in special needs planning.