There are 58 million Americans five years of age or older that are identified as special needs making them the largest single minority in this country. The majority of federal and state benefits available to help persons with disabilities are needs based, meaning income and assets are strictly limited and can often by misinterpreted, resulting in costly mistakes.
Properly Drafting a Trust
A common mistake is failing to create a properly drafted trust to qualify the disabled family member for government benefits than can help pay for costly medical and/or living expenses. Qualifications for government benefits like Supplemental Security Income (SSI) or Medicaid dictate that the disabled individual has no more than $2,000 in assets. If your disabled loved one has assets above this threshold, they will have to be "spent down" to qualify for government assistance or otherwise protected in a properly drafted trust.
Understanding Disability Benefits
Well-meaning friends and extended family may not understand the complexity of disability benefits and give a disabled loved one money or assets that would disqualify them for state and federal benefits. It is especially difficult if the disabled person already has benefits and becomes disqualified because the "needs based" review discovered additional funding putting them over the $2,000 asset limit. It is best to avoid this situation as it is a big hassle to re-qualify your dependent for government assistance.
Be Cautious in Receiving Donations
Be wary of crowdfunding sites like GoFundMe to benefit your loved one with special needs. In the absence of qualified legal planning, these donations can disqualify SSI, Medicaid, food stamps and section 8 housing. A well-meaning fund campaign could cut the benefits of a disabled person and make their living circumstances worse than before.
What to do? Plan ahead! There are several ways to provide for your special needs dependent and stay within government guidelines for additional benefits. One of the best ways is to establish a special needs trust that has the specific purpose of supplementing federal and state assistance programs. By doing so, a disabled loved one can benefit from government programs, and have additional money to supplement what those programs provide.
There are strict rules when it comes to creating special needs trusts for a disabled family member. There are also restrictions on what the money can be used for. Contact our Milwaukee office at 414-253-8500 for assistance in determining what type of trust is best based on your loved one's particular circumstances.
There are no comments for this post. Be the first and Add your Comment below.
Leave a Comment