Will Trust Income Affect SSI Eligibility?

SSI is a "means-based" program, placing very strict limits on a recipient’s income and assets. In 2024, the maximum federal SSI benefit for an individual is $943 a month, although many states add a small supplement to this. Income paid from a special needs trust to a beneficiary will reduce Supplemental Security Income (SSI) benefits by one dollar for every dollar paid to them directly. In addition, payments by the trust to the beneficiary for food or housing are considered "in kind" income, and again, the SSI benefit will be cut by one dollar for every dollar of value of "in kind" income.

Choosing a Knowledgable Trustee

Some attorneys draft special needs trusts to limit the trustee's discretion to make payments that could jeopardize benefits. Others do not limit the trustee's discretion, but instead counsel the trustee on how the trust funds may be spent, permitting more flexibility for unforeseen events or changes in circumstances in the future. The difference has to do with philosophy, the situation of the client, and the amount of money in the trust. Choose your trustee carefully.

Creating a Trust that Meets Your Unique Goals

Parents want to optimize their estate to use, enhance, and enrich assets for their child. At the same time, maintaining their enrollment in public benefits programs, such as SSI or Medicaid is essential. Establishing a special needs trust is a key way to achieve this goal. With so much at stake, be sure to seek out a qualified attorney with expertise in the area of special needs planning. They can tailor your estate plan to best suit your wishes as well as the specific needs of your child.

Learn more about lifetime money management for your child using special needs trusts. Contact a qualified special needs planning attorney near you today.