Children who have a mental or physical disability often face many challenges. In order to provide the type of round-the-clock care that’s often necessary, in many cases parents of a disabled child are forced to make sacrifices. For some, this may mean one spouse cutting back on work hours or choosing to stay home and be a fulltime care provider. For single parents, the sacrifices are even greater as are the monthly expenses of raising a disabled child on one income.
For these parents and children, supplemental security income can help provide much-needed monthly financial support. In order to qualify to receive SSI benefits, a child must meet certain medical requirements related to their disability. The child’s family must also meet income requirements which include a monthly income cap of $1,040.
In some cases, families in need of SSI benefits fail to qualify for such benefits because of assets that exist in a child’s name. An inheritance in excess of $2,000 left to a child is one example of how assets intended for future use can potentially jeopardize the SSI eligibility of a disabled child and their family.
One way families can provide for a disabled child’s financial future while also continuing to maintain their SSI eligibility is to set up a special needs trust. Parents can choose to fund a special needs trust in a number of ways including investments, cash, benefits from insurance or retirement plans and real estate. Setting up such a trust is complex and should be handled by an attorney.
Once a special needs trust has been established, the trust can be funded to help provide for a disabled child’s future financial security. Parents would be wise to tell relatives about the trust and advise that any gifts of money or inheritance be designated directly to the trust and not in the child’s name.
Source: The Huffington Post, “Maximize Your Disabled Child’s Government Aid,” Jason Alderman, March 27, 2013