Financial & Estate Planning

If you’re setting up a trust to help someone who’s disabled, you may want to preserve the trust beneficiary’s eligibility for government benefits, including:

  • Supplemental Security Income (SSI), administered by the Social Security Administration, which pays extra cash to disabled individuals with limited assets and income.


  • Medicaid, a joint federal-state program that provides medical assistance as well as community medical services, home care services, and institutional care services to low-income disabled individuals.

Some vital programs are available only to people who are receiving such public benefits. However, people who have a certain amount of assets won’t qualify.

If you give or bequeath assets directly to a loved one who’s on SSI or Medicaid, he or she probably will be taken off public assistance until that wealth is all spent. The solution, in many cases, is to create a “special needs” trust. Such a trust can enhance the beneficiary’s lifestyle by providing certain items, from eyeglasses to vacations, while retaining his eligibility for public assistance benefits.

To keep public agencies from denying benefits to your disabled dependent, the language of the trust should specifically state that the trust won’t pay for basic needs, which will remain the responsibility of government agencies. Then the trustee can use the money in the trust to provide “extras” not covered by SSI or Medicaid.