How special needs trusts protect your children from losing government benefits

Do you have children with special needs?

If you do this, children with special needs may receive much-needed government benefits.

These government benefits come in many forms.

First of all, there is SSI. SSI stands for Supplementary Guaranteed Income. SSI is for low-income people who have never worked or don't have enough working hours to earn work credits.

SSDI or social security disability income is available to those who have completed work credits.

You are either eligible for SSI or SSDI, but not both.

Since most children with special needs and adults with special needs have never worked, they usually participate in SSI.

Since SSI is income-based, accepting a one-time inheritance will immediately cancel their SSI status.

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 For people with special needs, because it also takes them out of Medi-Cal and Medicare, the much-needed insurance plan covers 100% of medical needs.

In addition, they take years to re-qualify and re-qualify only after living in the poverty line.

Fortunately, all of this can be avoided by something called special needs trust. Special Needs Trust is an irrevocable trust that works with Life Trust [Revocable Trust].

In a special needs trust, you design a supervisor to monitor the funds. You see, you don't leave the money directly to children with special needs, but you will leave it to the trust of special needs. Funds sitting in this special needs trust are managed by the custodian, and most things can be used for children with special needs, except for food and shelter.

The reason you can't use them on food and shelter is because SSI is dealing with this issue, and if you use special demand trust funds for the same thing, you may be disqualified from SSI.

In your life trust, you name your child a beneficiary and name it the beneficiary. These are your heirs. However, instead of naming your special needs directly as children, you are naming special needs trust.

For example, if you have three children, you will say:

• 1/3 of Joey Smith
• 1/3 of Johnny Smith
• 1/3 to Jimmy Smith Special Demand Trust Date is September 16, 2014

Jimmy Smith is a child with special needs. Other children can leave money directly because they do not risk the disqualification of government assistance.

How much does a special child's name cost?

Believe it or not, SSI stipulates that it can only be $2,000 [$2,000]. This is not a lot, and there is no legacy left directly to children with special needs [rather than establishing and naming special needs trusts] that will result in disqualification of government aid.

Why do you have to tell the whole family?

Once you have set up special needs trust, be sure to let the entire family know of one and its name. In this way, all your relatives know how to leave the money to your special needs child Jimmy.

Life insurance and 401k beneficiaries and POD accounts?

You can also reassign your life insurance policy and 401k pension benefits to the Jimmy Smith Special Needs Trust on September 16, 2014, not just Jimmy, as these may also affect the tiny threshold of $2,000.

In addition, visit your bank and change the POD or death beneficiary's payment to a special needs trust that Jimmy shares inheritance rights.

in conclusion

As you can see, creating a separate irrevocable special needs trust for your special needs child is essential to retain government benefits, including SSI and health insurance. It is equally important to point out the trust of special needs in your life trust and to inform all relatives to do the same. Also, be sure to do this on your life insurance, 401k and POD accounts.

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