Estate Planning for People With Disabilities
You may or may not be aware that there is a cap on monthly income for individuals who receive disability benefits through Social Security. This limit is different in every state, and is always low, but Florida has one of the lowest income caps for disabled people in the country. In fact, in order to qualify for disability benefits in Florida, an individual’s income cannot exceed $771 each month. Any additional financial income, including help from family, or an inheritance, can affect their eligibility for those benefits. Healthcare costs without disability can be prohibitive, and even a large inheritance may immediately be wiped out by a month or two of healthcare without social security coverage. For this reason, it is incredibly important to talk to a lawyer before leaving a large sum of money to a disabled friend or relative.
How Can I Leave Money for a Disabled Friend or Relative Without Affecting their Eligibility for Social Security Benefits?
This is an important question to ask, and if you are asking it, it is important to consult with a lawyer to ensure that you are utilizing the best possible option for both you and your intended beneficiary. There are absolutely ways to leave inheritance for a loved one who is receiving social security disability benefits, but they do require special planning in advance. Generally, the best way to accomplish that is by creating a Special Needs Trust. Because all assets added to the trust are the property of the trust, and not the disabled individual, any assets in the trust will not count toward the individual’s assets and will not affect their eligibility for social security.
Are There Limitations on a Special Needs Trust?
A special needs trust cannot be used to make large cash gifts to the disabled individual, as that would transfer the money into their possession and affect their eligibility. It also may not be able to be used for things like housing and food, as that is what the social security payments that they are receiving are intended to cover, so having available resources to help with those expenses would likely work against them. However, it can be used for a plethora of other necessary expenses, such as paying for a caregiver; services that the individual is unable to perform due to their disability, such as cleaning, cooking, and pet care; clothing; furniture; and travel. The trust can also be used to fund things such as phone or internet service, and can be used for educational purposes.
Schedule a Consultation with the SG Firm
If you live in Florida or have an intended disabled beneficiary who lives in Florida, the experienced disability estate planning attorneys at Miami’s SG Law Firm are ready to help. We will ensure that your loved one is taken care of, and that a trust is established that will provide them with everything they need while not affecting their much-needed government benefits. Contact the SG Firm today to schedule a consultation.