If you are getting ready to receive Social Security disability, you may be getting two separate amounts. Not only will you qualify for a monthly benefit, but you may also qualify for a large back award that covers the period that you have been waiting to be approved. Before you start making plans to spend this money, you need to first understand how this back payment may have a negative effect on other government benefits you may be receiving. Fortunately, there are ways you can receive the money that you are due and continue receiving the services you need. One way to do this is by setting up a special needs trust. Understanding what this is may be the first step in protecting your benefits.
What Is A Special Needs Trust?
A special needs trust is a legal arrangement that will allow you to deposit and use property that is held in the trust for your benefit, but that will protect your legal qualifications for other public benefits. You qualify for this type of trust by being physically or mentally disabled and there are two different types of this trust.
- Revocable trust - This is a trust that you totally control. You are able to cancel or alter the provisions of your trust at any given time. Because you retain this type of control, any resources that are placed in the trust are considered to be part of your financial resources.
- Irrevocable trust - This is a trust that is controlled by others who are called trustees. These trustees may be other family members, or non-related people who have been appointed by the court to perform this role. Once you transfer your resources into an irrevocable trust, they can be used for your benefit, but you no longer own the assets that are in the trust. By giving up ownership of these resources, you will still be able to benefit from them, but they will not count towards the resources that you have for your qualifications.
Will You Benefit From A Special Needs Trust?
If you have applied and qualified for government benefits you are aware that there are certain financial limits that you must remain under to stay qualified. The financial limit often varies based on the benefit, but most benefits such as food stamps, or SNAP benefits, do not allow you to have more than $2,250 in countable resources. The resources that will affect your eligibility include the money that you have in the bank, or other financial resources you have at your disposal. Other benefits that also have financial restrictions include:
- Housing assistance
- Energy Assistance and more
If you receive a lump sum benefit from Social Security, it can quickly push you past this limit, which will mean that you will no longer qualify for these benefits until you spend the benefits you receive. Fortunately, there is a way around this. By placing these benefits into a special needs trust, you will be able to receive these back benefits as well as stay qualified for the government benefits you are currently receiving.
What Can Go Into A Special Needs Trust?
In addition to your back social security benefits, you can also deposit real estate, stocks, bonds, and other types of inheritances. Once the trust is established, the person or people who are appointed as trustee will be able to pay for goods and services for you. There are a wide variety of things that your trust can pay for. These include:
- Educational opportunities
- Personal care attendants
- Medical and Dental expenses
- Physical rehabilitation and more
Two things that cannot be paid for by a trust without impacting your other benefits include food and housing, but there may even be provisions that allow you to get around these. A Social Security disability lawyer from a firm like The Nelson Law Firm LLC will be able to review your situation and tell you more about how a special needs trust may benefit you. Ask them for more information.