Supplemental Security Income or SSI is a government program that is in place to provide disabled people with a basic source of ongoing financial support. However, it is not automatically afforded to you if you are disabled. To qualify for Supplemental Security Income, you must be able to prove that you have financial need. In addition, the eligibility is not necessarily permanent. An improvement in financial status could result in a loss of eligibility.
A similar situation exists with regard to the Medicaid program. This is a government run health insurance program that is jointly administered by the federal government along with each state government. We practice law in the state of California, and in our state, the program is called Medi-Cal.
This program is not exclusively for people with disabilities. Anyone who can demonstrate a significant level of financial need may be able to qualify for Medi-Cal coverage. However, many people with disabilities cannot earn much income, so they rely on Medi-Cal for health insurance.
Personal Injury Settlement
As we have stated previously, once you become eligible for these government programs, your eligibility could be lost if you were to come into some money. Some people become disabled due to injuries sustained in accidents, and some of them ultimately receive personal injury settlements.
What would you do in a situation like this? When you get your settlement, you could lose your government benefit eligibility.
A possible solution would be the creation of a special needs trust. When the funds are coming from the person who will be the beneficiary, the special needs trust would be called a first party or self-settled special needs trust.
The beneficiary could not directly access the assets in the trust. A trustee would administer the trust, and under program rules, the trustee could utilize the assets for certain approved purposes that benefit the disabled individual. These expenditures would improve the beneficiary’s quality of life, but benefit eligibility would not be forfeited.
The first party special needs trust would protect the personal injury settlement throughout the life of the beneficiary, and that is the good news. The bad news is that the Medi-Cal program would seek recovery for monies spent from the estate of the beneficiary after his or her passing.
Special Needs Planning Consultation
If you have questions about special needs planning, we would be glad to sit down and discuss everything with you in person. Our firm offers free consultations, and we provide each and every one of our clients with personalized attention. At the consultation we will get to know you, we will become familiar with your situation, and we will ultimately provide you with recommendations.
To set up an appointment, send us a message through our contact page: San Jose CA Special Needs Planning.