For individuals with disabilities who rely on Medicaid or Supplemental Security Income (SSI), careful planning is essential to protect their eligibility for these vital programs. In Florida, many government benefits are resource-based, meaning the recipient must keep their countable assets below a strict limit—often $2,000. While these programs provide essential medical coverage and financial assistance, they can be easily disrupted if a person with disabilities unexpectedly receives money or property.
A common situation occurs when a parent or relative leaves an inheritance to a loved one with special needs. Although well intentioned, a direct inheritance can unintentionally cause serious problems. If the beneficiary receives funds outright and their total assets exceed the $2,000 limit, they may immediately lose eligibility for Medicaid or SSI. Losing Medicaid can be particularly devastating because it often provides access to critical services such as long-term care, therapies, medical equipment, and community support programs.
This is where special needs trust planning becomes extremely important.
A properly drafted Special Needs Trust allows assets to be held for the benefit of a person with disabilities without being counted as their personal resources. Instead of the beneficiary owning the assets directly, the trust holds and manages the funds through a trustee. Because the assets are not considered the beneficiary’s property, eligibility for Medicaid and SSI can be preserved.
Funds in a Special Needs Trust can still greatly enhance the beneficiary’s quality of life. The trust may pay for items and services not covered by government benefits, such as specialized therapies, education, transportation, technology, personal care, recreational activities, and other supports that improve independence and well-being.
Families in Florida often include special needs trust provisions within their estate plans to ensure that a loved one with disabilities is protected if they inherit money in the future. Without this planning, even a modest inheritance could unintentionally disrupt essential benefits.
Thoughtful planning ensures that families can provide financial support to a loved one with disabilities without jeopardizing the benefits they rely on for health, stability, and long-term care.
Questions about your estate plan? Call our office at (561) 694-7827 and schedule a consultation. Elder & Estate Planning Attorneys PA, 480 Maplewood Drive, Suite 3, Jupiter, Fla.The content of this article is general and should not be relied upon without reviewing your specific circumstances by competent legal counsel. Reliance on the information herein is at your own risk, as it expresses no opinion by the firm on your legal needs. An attorney client relationship is not created through the information provided
