Government benefits like Social Security, Medicare, and Medicaid are incredibly helpful for people with disabilities. However, beneficiaries of these programs can lose their benefits if they gain assets or income. Fortunately, special needs trusts can help disabled people accumulate funds without losing their government benefits.
Resource Test & Government Benefits
Disabled persons must meet several requirements to qualify for Social Security and other government benefits: one of these requirements is a resource test. The resource test calculates someone’s countable resources to determine eligibility for benefits. If someone surpasses the “resource limit,” then they can no longer receive the benefit.
The resource limit differs from benefit to benefit, but let’s look at Supplemental Security Income’s (SSI) resource limit as an example. To maintain beneficiary status for SSI, a person must have less than $2,000 in countable resources. Therefore, if a disabled person’s relative dies and grants them an inheritance of more than $2,000, then the person will lose their SSI benefit.
This resource limit is seemingly unfair, but a special needs trust can help!
A Special Needs Trust Is the Solution
Money put in a special needs trust does not count towards the beneficiary’s countable resources because the money is not in the beneficiary’s possession. However, the beneficiary receives money from the trust over time, ensuring he or she is financially supported while maintaining eligibility for government benefits.
Need to Set Up a Special Needs Trust?
Legacy Enhancement is a non-profit corporation established to help individuals who are disabled or have special needs. Our professional trust fund managers are experts in establishing, dispersing, and supervising special needs trusts. If you need to set up a special needs trust, gives us a call!
Call (888) 988-5503 now to consult with one of our experts!