You do not have to be disabled to qualify for Medicaid, but many people with special needs are unable to earn much income. As a result, they qualify for Medicaid or Medi-Cal, and this coverage is extremely important for people with disabilities.
The acronym SSI stands for Supplemental Security Income. As the name would suggest, this is a government program that provides an ongoing source of income for disabled people who are not in a position to earn much on their own.
To qualify for these programs, you must be able to demonstrate a significant level of financial need. If you apply for benefits on a given day, your financial status at that time is going to be used to determine your eligibility. You may be approved at that time, but your eligibility could be forfeited if your financial status was to improve.
Estate Planning Implications
We have established the fact that benefit eligibility could be lost if a benefit recipient was to come into some money. As a result, you must take this into consideration if you want to set aside resources for someone with special needs who is enrolled in government benefit programs.
A direct inheritance could cause a loss of benefits, so you must implement advanced estate planning techniques.
One way to provide for someone with a disability would be to make this individual the beneficiary of a third party special needs trust, i.e., a trust created for the disabled person by a third party, such as a family member or friend. These trusts are sometimes called supplemental needs trust, because assets in the trust can be used to satisfy the supplemental needs of the beneficiary.
Supplemental needs would be needs that are not being met by the government benefits. As long as the trustee uses assets in the trust to satisfy only these needs, benefit eligibility would not be impacted.
Plus, when you convey assets into a special needs trust for the benefit of a loved one, the Medicaid/Medi-Cal program would not seek reimbursement from assets that remain in the trust after the death of the beneficiary.
Free Report on Special Needs Planning
There is a lot to take into consideration if you want to help out a loved one with special needs. If you would like to obtain more detailed information, download our special report.
This report is free, and you can access your copy through the Reports page of our website.
Our firm offers consultations to people who want to provide for all of their loved ones in the optimal fashion. To schedule an appointment, simply call our office.