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Careful planning needed with children on SSI

If you are a parent of an adult child who relies on Supplemental Security Income (SSI), you probably worry about their future. They may have a disability which has made life difficult, and it's only natural to be concerned about their care and their life after you are gone.

One tragic mistake commonly made in estate planning is leaving an adult child who relies on SSI proceeds from your estate in order to benefit them when you are gone. It can easily knock them over the asset limits and reduce or eliminate their monthly benefits. Careful planning is essential to make sure that this does not happen and they continue to receive the stipend they are entitled to.

How it works

If you have an adult child with a disability, their SSI income is subject to many constraints. The most rigorous of these is the asset limit of $2,000 on everything which is not part of their immediate life. There is a long list of what can count against this limit, including:

  • Money in a bank account or cash
  • Stocks or other investments
  • Real estate other than their own home
  • Any personal belongings in their house

If you pass on to an adult child receiving SSI any of these things, it could end their eligibility for SSI. Not counted against this limit is the house which they live in, their personal vehicle, and certain money set aside from previous monthly checks.

What to do instead

If you have an adult child whom you would like to benefit from your estate, it is vital that you have a will which takes this into account. The simplest way to be sure that any value from your estate is not counted against the SSI asset limit is to pass it on instead to another family member whom you can trust.

Such a person may be difficult to find, but it is critical. A trust fund does not get around the strict rules for SSI either, so the options are very limited. Your will can be written in such a way that your child is named, as long as they are not the beneficiary in any direct way.

Expertise matters

Every parent of a disabled adult child is going to have a lot of special concerns which need to be put into their will. Even without SSI considerations, there are often limits on income or assets for any public assistance.

It is important that you consult an experienced estate planning attorney who understands the needs of vulnerable adults. It takes a lot of personal attention and careful consideration to set up an estate which properly benefits them without triggering any other side effects which may hurt in the long run.

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