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Even a small inheritance, personal injury settlement, or another windfall can inadvertently disqualify a person with special needs from receiving the valuable public benefits they rely upon, such as Medicaid and SSI. Proper use of a Special Needs Trust (sometimes called a Supplemental Needs Trust) can set aside money to be used to enhance that individual’s quality of life while maintaining eligibility for their public benefits. In addition, a special needs trust may be used to preserve assets for the benefit of someone entering into a nursing home.

The cost of care for someone with special needs can be very high, and as a result, special needs individuals often rely upon public benefits for care and support. Programs like SSI and Medicaid, for example, will only provide benefits so long as the individual has limited income and fewer than $2,000 in assets. This can be a problem when someone who receives SSI or Medicaid receives an inheritance, or perhaps a settlement from a personal injury case.

The benefits provided by SSI and Medicaid are minimal by design and don’t provide benefits for anything beyond basic needs. Even so, these programs are very valuable for special needs individuals who cannot work to support themselves.

An inheritance that leaves a Medicaid or SSI recipient with more than $2,000 in assets would result in the individual being disqualified. By undertaking a little planning, however, an inheritance, personal injury settlement, or another windfall can be preserved to provide for the “supplemental needs” of a Medicaid or SSI recipient.

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