Should A Person on Disability Inherit?

Medicaid and SSI both have very stringent resource (and income) thresholds that could be implicated by a bequest or gift. The result is that the disabled individual could loose their SSI and Medicaid benefits. Therefore, they could be forced to pay for or even forego nursing care or other healthcare benefits.

What exactly is meant by "resource"? A resource is defined as cash or other liquid assets or any real or personal property that an individual owns and could convert to cash to be used for support and maintenance. So even if one who is disabled inherits a small interest is a house (real estate), it is considered a resource because everyone with an interest in the property has the right to seek their financial (share) interest in the real estate. That means they can force a sale or be brought out by the other owners.

So, how can a disabled person obtain and inheritance and still maintain their Medicaid and/or SSI benefits? The legislature and courts in Pennsylvania have recognized special needs trusts or supplemental needs trusts that when properly executed can reduce the costs to famiies and provide additional resources for the disabled person on Medicaid or receiving SSI.

We will continue this week to discuss the different types of special needs trusts. Contact our offices at http://www.ythlaw.com/ for expert estate planning advice.

Estate Planning for Family Members with Disabilities

Over the next few days, I will discuss the issues pertaining to estate planning for families with disabled family members. Generally, family members desire to leave money to a disabled loved one in order to maintain or improve the quality of life. However, if this is done with a bequeath in a Will or an outright gift, more harm than good could result.

Medicaid and SSI both have very stringent resource (and income) thresholds that could be implicated by any significant bequest or gift. The result is that the disabled individual could loose their SSI and Medicaid benefits. Therefore, they could be forced to pay for or even forego nursing care or other healthcare benefits.

Let's discuss what can be done over the next few days. Feel free to contact us at http://www.ythlaw.com/ to discuss all your estate planning needs.

5. Addresses special circumstances - continues with Special Needs Trust

In my last post, I discussed 26 year old Julian who sustained permanent mental and physical disabilities as a result of complications at birth. How does one continue to take care of Julian when his parents are no longer living.

A special needs trust, sometimes referred to as a supplemental needs trust, is critical to protecting Julian’s health and well-being. The purpose of the special needs trust is to assure continuity of care and non-disruption of government supported programs and benefits, both of which are of primary concern for Linwood and Jordan, Julian's parents.

As pertains to preservation of government benefits, if Julian directly owned the assets, he would not qualify for Supplemental Security Income Benefits referred to as SSI. In addition to providing him with a monthly stipend, SSI eligibility qualifies Julian for other governmental programs. Because Julian has no control over (does not own) the money or assets in a special needs trust, the contents of the trust are not considered when calculating Julian's total assets. The special needs trust thus ensures that Julian will remain eligible for governmental benefits and programs regardless of the actual value of his total assets.

Do you have any questions on Special Needs Trusts? Leave your comments here or contact us at www.ythlaw.com