Protecting SSI For Your Special Needs Child

by | Jul 15, 2022 | Special Needs Trusts |

We have talked about the unique estate planning considerations for people with special needs. By inheriting your assets, they may become ineligible for the programs and forms of assistance they rely on. Though these parents want to support their children and ensure they are provided for, they may inadvertently harm them by not being thorough in their approach to estate planning. 

At J. Kevin Tharpe, P.C., we resolve these issues for our clients in various ways. Our goal is to develop a plan that covers your child’s needs without jeopardizing their ability to take advantage of the government assistance programs. We achieve this by creating special needs trusts. These are either self-settled trusts or third-party special needs trusts. Although this is how we maintain their eligibility, it is also essential to understand why we have to. 

Supplemental Security Income 

It is important to know that although disabled people can use Social Security Income (SSI), it is different from Social Security Disability Insurance (SSDI). A special needs child with intellectual and developmental disabilities (IDDs) may be unable to work. SSI provides them with an income. SSDI eligibility is based on work credits that are gained through their own employment or their family’s work credits

When your special needs child qualifies for SSI, most states automatically qualify them for Medicaid. 

How You Lose Your SSI Benefits

You need to be aware of the asset limit and income limits. When you choose to include your child in your estate plan, you must know how the receipt of both money and assets could stop SSI. Even if you decide to leave your house to your special needs child, it could still cause problems. 

The Social Security Administration (SSA) views shelter as income. There is no guarantee that receiving the home will eliminate their eligibility for SSI, but it could lower the amount of money they receive—which is relatively low even when the person gets the maximum amount allowable. The SSA sets resource limits (currently set at $2000), and receiving money or assets could put them over the threshold.

Kevin Tharpe, P.C.

Special needs parents can leave assets to their children without interfering with the SSI they receive. This is done through diligent estate planning. Contact J. Kevin Tharpe, P.C., to schedule a consultation if you want to discuss the available options.

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