Special Needs Loved Ones Deserve Special Estate Planning Considerations to Preserve Their Benefits

Kristen Marks

by Kristen Marks

Kristen Marks is a travel enthusiast, empty-nest mom to two young adult children, athlete, attorney, author, speaker, proud wife of almost three decades (to the same wonderful man!), and the founder of My Pink Lawyer®, Florida Estate & Legacy Planning attorneys. Kristen has been crafting professional estate plans for Floridians and their families for over 28 years.

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At My Pink Lawyer®, our Florida attorneys work with many estate planning clients who have disabled children eligible or receiving SSI disability public assistance benefits.


Jill Marks at a Night to Shine Tuscaloosa 2018Although most of our parents want to leave their special needs children an inheritance, without proper planning, a well-meaning inheritance may inadvertently disrupt a child’s public assistance benefits.


Fortunately, we have a “magic” planning tool available for parents to leave an inheritance of any size to their disabled child or other loved one which will not affect the child’s disability benefits. This magic planning tool is called a Special (or Supplemental) Needs Trust (“SNT”).


So long as the SNT is named the beneficiary of the inheritance rather than the disabled child himself and the trust beneficiary (the disabled child) does not control the property or monies held by the trust, then any trust property, including a home, does not affect the disabled beneficiary’s SSI benefits.


Assets contributed by a third party to a properly drafted special needs trust are not considered resources of the disabled beneficiary because the beneficiary has never had control over them, and they are not subject to the $2,000 SSI asset limit. Theoretically, a special needs trust could hold millions of dollars in cash, houses, cars, etc. - and yet the trust beneficiary would still financially qualify for SSI.


Although owning a home as a primary residence will not necessarily disqualify a beneficiary of SSI from receiving SSI, it is better to leave the home to a special needs trust so the person serving as trustee can make important decisions about the home.


Also, if the beneficiary of the SNT owns the house outright in his or her own name rather than in the SNT, trust expenditures on maintenance will be counted as in-kind income. However, if the SNT owns the home, the trustee can spend whatever is necessary to maintain the home without affecting the disabled beneficiary’s SSI grant.


In addition to owning the home that a disabled beneficiary can live in rent-free, here are some additional expenses that the SNT can pay for without jeopardizing the beneficiary’s public assistance benefits:


• appliances (TV, VCR, DVD player, stereo, microwave, stove, refrigerator, washer/dryer)

• computer hardware, software, programs and Internet service

• curtains, blinds, drapes

• fitness equipment

• furniture, home furnishings

• hobby supplies

• home alarm, monitoring, and response systems

• home improvements, repairs, and maintenance (not covered by Medicaid), including tools to perform home improvements, repairs, and maintenance by homeowner

• house cleaning and maid services

• insurance (for home or possessions) UNLESS the insurance is a mortgage requirement

• linens and towels

• non-food grocery items (laundry soap, bleach, fabric softener, deodorant, dish soap, personal hygiene products, paper towels, napkins, toilet paper, household cleaning products)

• repair services (for appliances, household, fitness equipment)

• telephone service and equipment (including cell phone)

• utility bills (satellite TV, cable TV, telephone - but not gas, water, or electricity),


Here are some basic expenses that should NOT be paid through a special needs trust:


• cash given directly to the beneficiary for any purpose

• food or groceries

• restaurant meals (except if given as an occasional gift)

• rent or mortgage payments

• property taxes

• homeowners or condo association dues

• homeowners insurance IF the insurance is a mortgage requirement

• Utilities such as gas, water, and electricity

• Utilities hookup or connection charges


However, many of these “prohibited” payments will only cause a one-third reduction in the disabled beneficiary’s SSI benefits. If given the discretion in the SNT, the trustee might decide that the benefit of the trust making these payments far outweighs the loss of income to the disabled beneficiary.


To learn more about planning for a Florida special needs loved one, download our FREE Special Needs Planning Guide today by clicking the button below to be taken to the order page.


Click to Download  FREE Special Needs Planning Guide NOW


Kristen "Protecting Families & Their Loved Ones" Marks


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