If you are thinking about creating a trust and one of your beneficiaries receives SSI benefits, you need to understand how trusts can affect SSI eligibility. Sometimes, trusts count as resources with respect to SSI, but there are exceptions, such as special needs trusts.
It is important to review all of your options and understand how the decisions you make with respect to estate planning could affect your life and the lives of your loved ones.
SSI benefits and special needs trusts
According to the Social Security Administration, trusts can reduce SSI benefits for some beneficiaries. However, special needs trusts are an exception and these trusts can allow beneficiaries to receive assets from the trust without jeopardizing their ability to receive SSI benefits. Moreover, trusts are not always counted as income in the event that doing so would cause undue hardship.
If you have a family member struggling with a serious disability, you must take this issue into consideration. Sometimes, those with disabilities face additional hardships because they lose access to government assistance that they depend on.
Setting up a special needs trust
If you determine that creating a special needs trust is the right move, you need to approach the process with care. Make sure you go over your circumstances carefully and if you plan to pass down assets to a disabled loved one, thoroughly go over their needs and understand how this move could affect them in the future.
A special needs trust could give you and your family peace of mind, so make sure you consider this strategy if you have a disabled loved one who counts on SSI benefits.