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Don’t Jeopardize a Beneficiary’s Eligibility for Government Benefits

On Behalf of | Jul 1, 2014 | Blog Posts |

If you want to steer money to a beneficiary with special needs, be very careful. Anyone who receives more than a small cash gift will lose important government assistance-for example, Medicaid coverage that’s crucial for a beneficiary who will never have a job that offers health insurance. Under current law in most states, you cannot receive Supplemental Security Income or Medicaid if you have more than $2,000 in “countable” assets (not all assets are counted for purposes of eligibility).

You can, however, create what’s called a special needs or supplemental trust for the person with a disability, and name the trust as beneficiary of your life insurance policy. A property drafted special needs trust will let the trustee (the person you choose to manage trust funds) use the proceeds for the beneficiary, without jeopardizing eligibility for benefits.



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