Individuals who qualify for certain public benefits such as Supplemental Security Income (SSI) and Medicaid must maintain their eligibility under the programs’ income and resource rules to continue to receive these benefits. These eligibility rules are complex. In sum, the individual’s access to excess funds must be very limited to maintain eligibility for their public benefits. An inheritance received through someone’s Will, or a Trust, could cause the individual to lose their benefits.
Social Security and Medicaid have rules that allow a person to save an inheritance while maintaining their eligibility for these programs. However, these rules are specific. Structuring the inheritance is key. One way to do this is to create Trusts or modify existing trusts so that it does not count as a resource to the individual under program rules. In Texas, a beneficiary under a Will or Trust can modify the terms of an existing Trust so that they can maintain their eligibility through the use of a Special Needs Trust (supplemental needs trust). Depending on the inherited trust terms, Trust Modifications could be done with an amendment to the Trust document. Otherwise, an inherited trust can be modified and converted to a Special Needs Trust through a court proceeding if all necessary parties are agreed. Law Office of Adriane S. Grace, PLLC assists clients with modifying Trusts, including testamentary Trusts in a probated Will, to qualify as a Special Needs Trust.
