Leaving an Inheritance for a Disabled Heir

When planning an estate, it pays to make sure you have accounted for all potentials – Including a disabled heir. While it may seem that your most vulnerable loved ones need the most help and thus the largest share of your estate, this may not be the most beneficial option for them for various reasons. Thankfully, there are other ways to help and provide for them after your passing. One important factor to consider is whether or not your beneficiary is receiving government assistance. Frequently an inheritance can make your disabled beneficiary ineligible for further public assistance, either temporarily or in the long term. These are situations you should plan for.

There is a wide range of situations that could qualify or disqualify a disabled person from receiving government assistance. Work history, assets, investments, and other qualifying factors could determine whether or not a disabled person is eligible to receive Supplemental Security Income (SSI). This program is in place to help the disabled maintain a basic and dignified standard of living – And in Florida, this also provides healthcare through the state’s Medicaid program. SSI provides on average $698 per month, which can be a significant security net for many vulnerable individuals. Moving an individual outside of a qualified income bracket can put them at risk of instability in the long term.

What is SSI Eligibility?

The guidelines that determine who qualifies for SSI tend to be rather strict. For example, to qualify, a person must typically have a disability present that prevents them from working. In addition, the individual must be indigent or below the poverty line and have less than $2,000 in assets. While many other factors play into the decision of eligibility, these are the most pressing standards that must be met.

Because of this, if you wish to leave money for a disabled loved one, you should do so through specific means that allow them to maintain their existing safety nets.

One Potential Solution

One possible solution to this problem is to create a “special needs trust” for the benefit of your loved one. If, on the other hand, you were to simply leave money in the form of the gift or directly leave an inheritance to that person, you could disqualify them from their SSI benefits on the grounds that their assets would exceed the $2,000 limit. This would leave them without access to their regular benefits – Including Medicaid – Until the inheritance is gone.

A special needs trust will not interfere with their regular benefits while still increasing their quality of life by allowing them to pay for travel expenses, entertainment, and other expenses that they otherwise would not have had access to. This elevates their quality of life above the government minimum standard and allows you to care for them without complicating their situation, which is the main goal of this form of trust.

If you have a potential beneficiary in mind who is receiving disability benefits, please let us know. We would be happy to walk you through various options, review your intended outcomes and help you build a plan that allows you to care for your loved ones in the way that best suits their needs.