Question: I have an adult daughter who is developmentally disabled. She is able to work and receives Social Security Disability Insurance as well as Medicare. Is a special needs trust something I need to consider in my estate plan?
Answer: Social Security Disability Insurance, or SSDI, is a benefit that individuals receive because they have worked and have paid into the social security system. SSDI is not a needs-based program. If the individual is receiving SSDI, she can only work a limited amount of hours and/or have a certain amount of earnings, otherwise, she could possibly lose her SSDI benefits.
By contrast, supplemental security income, or SSI, is a benefit individuals receive when they are permanently disabled and qualify because they have very limited resources. Similarly, Medicare is not a needs based program, rather it is an age-based health insurance program. A special needs trusts is designed to allow an individual to create a trust for the benefit of someone who qualifies for a needs based program such as SSI that can be used to supplement the government benefit without disqualifying the individual from the program.
Comment: If you knew for sure that your daughter was never going to need SSI in the future, and will continue to solely receive SSDI and Medicare, then such a trust is not likely to be needed to protect her ability to remain a recipient of those benefits. However, it might be prudent to create a special needs trust if the future is not certain in terms of her benefits. I would tend to err on the side of caution and create such a trust, but as always, it depends on what we’re trying to achieve.
As always, if you have any questions or would like to learn more,
please contact Steve Shane at firstname.lastname@example.org or .
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