What can a special needs trust cover without hurting SSI?

One of the most important reasons to create a special needs trust for your child is to ensure that his or her Supplemental Security Income (SSI) benefits remain protected. In the event that your child receives a large inheritance, this can disqualify them from SSI.

In essence, a special needs trust allows your child to rely on SSI monies for essentials like clothing, food, shelter and medical care. The special needs trust should supplement the SSI funds and not replace them. According to Special Needs Answers, the special needs trust acts as a “parent’s pocket.”

The “pocket”

Essentially, the special needs trust pays for things beyond simple necessities. These may include certain things like education, counseling and additional medical attention.

Many people use money from special needs trusts to pay for appliances, to pay the salary of a professional companion, to cover legal or guardianship expenses, to pay for additional insurance costs or for burial expenses. Funds from this trust may also pay for vacations, houses (potentially) or even help with your child starting a business. Some special news trust recipients use the funds to get memberships to rideshares like Uber or Lyft or to buy public transportation passes.

Prohibited expenses

In the majority of cases, the beneficiary should not use special needs trust funds to pay for food or shelter. This may result in a reduction of benefits. However, there are certain situations where a small reduction in benefits is worth additional access to special needs trust funds. It is essential to work in tandem with a special needs planner to ensure that your child’s benefits through SSI remain protected.

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Kevin Tharpe

With 25 years of experience, Kevin understands how estate planning, special needs planning, and government benefits programs work together. This is a crucial element of a thorough plan. He explains your eligibility for benefits programs and ensures that you do not make costly mistakes that may disqualify you or deplete your assets.

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