Parents of children with disabilities have a lot of special challenges as they raise their child. Oddly, it may be more simple to handle the myriad of issues during the school age years, but as the child becomes an adult and leaves the school system everything becomes less clear. Does the disabled child move to a group home? Continue to live at home? And what happens when the parents are gone?
Financial sources recommend that those with mild or moderately disabled children consider Social Security disability insurance benefits and Supplemental Security Income for their child during the estate planning process. The wrong financial move could deplete inheritance assets and earn a benefit claim rejection from the Social Security Administration.
It was recently posited that those who may be leaving significant assets to a disabled adult who is living relatively independently, may want to establish a trust for a disabled adult heir rather than allowing the inheritance to pass through in a lump sum. There are several reasons for this.
- If the heir's health deteriorates, SSDI benefits could be obtained while the trustee is in charge of the trust.
- If the inheritance is in a trust, it does not count in the SSI determination.
- If the heir qualifies for SSI, then there is an automatic qualification for Medicaid.
The main idea is to save as many assets as possible to care for the heir's needs above and beyond what SSDI or SSI would cover. When parents have a child with a degenerative disease such as MS, or a permanent condition such as limited mental capacity from a brain injury, it is wise to consider all financial options, including SSDI and SSI, during estate planning.
Source: Metro West Daily News, "Examining estate planning options," Christine Keane, Oct. 20, 2012