YOU ASK:

What are the advantages of a self settled trust when receiving SSI?

WE ANSWER:

Before we answer this question, allow us to give a little bit of a background about the need for a self-settle trust.

Supplemental Security Income benefits are only for those who don't have much by way of assets and resources. If a person has assets that amount to more than the specified limit ($2,000), then the benefits will stop. That means that a person's benefit is in danger of being stopped if he is to receive an inheritance, the proceeds of life insurance or a settlement of a lawsuit.

A self settled trust is one way of circumventing this so as to ensure that SSI benefits are retained. This trust is to be paid by fund the beneficiary stands to receive. Federal law allows one to keep this kind of trust and still keep their SSI payments. Family members can set up the trust fund and also act as the trustees.

Aside from this, here are some advantages of a self-settled trust when this is established while you are a beneficiary of SSI:

  • The beneficiary also gets to keep his Medicaid and Social Security eligibility.
  • The trust can provide extra funds to spend for needs that are above and beyond one's basic needs (i.e. food, shelter and clothing).
  • The beneficiary can use the funds that are in the trust during his lifetime, even as he continues to enjoy the benefits from SSI and Medicaid.
  • The fund can be used to purchase specialized equipment, therapy, tools and training that is not covered by government-funded programs. These can include motorized wheelchairs, communications systems specially designed for the beneficiary's needs and additional therapy sessions and tools. Aside from these, he can also use the money for things that can improve his quality of life. This can include hiring a personal assistant, going on a vacation, school fees for additional training, or getting a car, computer, TV or VCR.
  • Upon the death of the beneficiary, Medicare will recover the cost it spent on medical care. The remaining money will be distributed to the family members.
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