submitted by Terry Lee Farber, RN, Esquire
If you have a disabled child or grandchild, you may be aware that there is a limit to the amount of resources he or she may own and maintain eligibility for monthly Supplemental Security Income (SSI) and/or Medicaid (MA). As such, you would not wish to leave an inheritance to him or her outright and potentially cause a loss of income or medical benefits.
Rather than leave such person’s inheritance to him or her outright you may arrange to have the inheritance pass into a Special Needs Trust. The terms of the SNT permit the Trustee to use the funds for the benefit for the disabled person without endangering the beneficiary’s eligibility for SSI or MA.
If you establish the trust, either in your Will or as a separate document, you choose who will serve as the Trustee. The choice of Trustee is critical as the Trustee makes all decisions regarding disbursement of trust funds for the benefit of the disabled person.
The Trustee must understand the restrictions on disbursements for those receiving SSI and MA. Moreover, the Trustee must be someone you know will carry out his duties faithfully.
Often parents or grandparents appoint the siblings of the disabled person. As long as the siblings meet the criteria above, this can work. However, in many cases there is no one to serve as Trustee. In such cases, you may appoint a nonprofit organization whose mission includes service as a Trustee.
The advantage of appointing a nonprofit organization is its knowledge of government benefits, not just SSI and MA, but also housing, food stamps and many other programs. Also, an organization never dies or gets sick. Although a nonprofit will charge a fee, this is preferable to leaving the assets outright and causing loss of SSI and MA for the disabled loved one.