Special Gifts for Special Children
Care must be taken in connection with an inheritance left to a child who is receiving Supplemental Security Income (SSI) from the Social Security Administration.
The SSI program is a “means tested” program. That simply means that if a recipient has the means to pay for his or her own care, the program benefits will be suspended until the recipient has exhausted those means. Then the regular SSI benefits will resume.
Because of that, if an SSI recipient receives an inheritance directly, the monthly benefits from Social Security will stop until the inheritance has been spent on the care of the recipient.
But the parents can utilize a Supplemental Needs Trust to get the best of both worlds for the child. Under such a trust, the SSI benefits will continue in full force. And the trust assets will be used to enrich the lifestyle and standard of living of the child to a higher level than mere subsistence.
By using this technique, the impact of the inheritance can be extended many years, often for the full lifetime of the heir receiving the assistance.
So, for those parents (or grandparents) who are planning their affairs for a child or grandchild who is receiving SSI benefits from Social Security, it is important for them to consider utilizing a Supplemental Needs trust to bless the heir to the greatest extent possible.