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Should you directly bequeath assets to a loved one using SSI?

If you have a disabled loved one, you may consider leaving him or her a considerable inheritance as part of your estate plan. After all, most people find it a great benefit to obtain a sudden, and possibly unexpected, influx of money. You may also believe that naming a special-needs individual as a beneficiary could help him or her carry on receiving needed care.

While your intentions may be in the right place, your actions could actually end up causing more harm than good. In particular, if your loved one receives Supplemental Security Income, he or she could possibly lose that benefit by obtaining a considerable inheritance.

Negative impacts on SSI

SSI often helps disabled individuals make ends meet. Of course, in order to qualify for this government program, the person has to meet certain stipulations. In particular, the individual cannot have over $2,000 in assets. This asset cap means that he or she could become disqualified for benefits if the inheritance puts him or her over that limit or affects other financial requirements.

Options other than direct bequests

If you have limited estate planning knowledge, you may think that naming individuals in your will acts as the only way in which you can bequeath items to loved ones. Fortunately, that idea is not the case. In particular, a special needs trust could help you set aside funds for your disabled loved one without putting him or her at risk of losing benefits.

Of course, if you plan early, you may feel that creating a trust could cause problems to you. After all, a special needs trust is irrevocable, which means that you cannot take out the assets once you create the trust. You may worry that in the event of an emergency you could need those funds. Fortunately, you could leave instructions that indicate that the creation of the special needs trust should take place after your demise.

Understanding your options

You certainly do not want to place any unnecessary burden on your disabled loved one, so you may want to ensure that you know the best ways in which to leave him or her an inheritance. By speaking with an estate planning attorney regarding your options, you may feel more at ease in knowing that you have taken the right steps to ensure your loved one's need will remain met.

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Leonard F. Berg, Attorney at Law