The Social Security Administration has strict rules about the assets a person who receives Supplemental Security Income can own. However, there is a way to ensure that a disabled person has the things they need without violating the government's rules. When a person on SSI in Ohio receives a large cash settlement or an inheritance from a family member, they may be able to keep the money if it is placed in a properly structured trust.
There are different types of special needs trusts, so it's important to choose the right estate planning tool to get the maximum benefit. First-party trusts are designed to hold funds when a disabled person receives from a large sum of money that would ordinarily disqualify them for government benefits. In order for them to keep their monthly check and medical coverage, a person who receives a settlement or inheritance can transfer the money to a trust. Although the funds are available for the beneficiary to use during their lifetime, assets left in the trust when they die are transferred to the government for reimbursement of medical expenses.
Unlike a first-party trust, a third-sparty trust uses assets that belonged to someone other than the beneficiary. A family member may set up a trust to ensure that their loved one is taken care of after they're gone. Assets in this type of trust are managed by a trustee but can be transferred to another person or charity when the beneficiary dies.
Choosing the correct type of special needs trust could make a difference in what happens to the funds when the beneficiary dies. It could also have an impact on whether they are eligible for government assistance while they're alive. An attorney who focuses on helping individuals and families set up trusts may be able to draft the appropriate documents to help ensure that a disabled person gets the care they need while they're alive and avoid unnecessary probate issues after they die.