I am receiving approximately $200,000 in inheritance with approx $100,000 in a personal residence. I would like to keep property as a rental income to help with my living expenses. Due to multiple sclerosis I have been on work disability for 15 years and need the disability income to live. How do I position my inheritance so that I do not put my disability income at risk? Is there some sort of trust that I can set up so I personally do not get income from the inheritance property?
There is only one type of trust available for a person receiving an inheritance who is currently also receiving SSI (social security income). It is a special needs trust with a payback provision to reimburse the state for money it paid for your care. Special needs trusts can also be called supplemental needs trusts. As this is a specialized trust under federal laws, it may also be referred to as a (d)(4)(A) trust.
Had the decedent set up this trust in his own estate plan, any money left after your death could be paid out to other beneficiaries. Unfortunately, this is not the case. Here you are receiving the money outright. Under the federal rules, you may not establish the trust yourself. The trust must be established by a parent, grandparent, guardian or court. The Trustee may in his discretion pay for supplemental needs, not for your basic needs such as housing or food. Upon your death, the state is repaid. If there is any money left in the trust, the balance can be distributed to your heirs.
Please make sure to see an attorney as soon as possible. If you receive your inheritance you will lose benefits. If you are forced to have the court establish the trust, it is not only costly it can take a few months depending on the court’s backlog.
Margaret L. Cross-Beliveau, Esq., LL.M.
Legal Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on since each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship. A lawyer experienced in the subject area and licensed to practice in the jurisdiction should be consulted for legal advice.
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The attorneys at The Beliveau Law Group provides legal services for estate planning (wills and trusts), Medicaid (planning and applications), probate (estate and trust administration), business law (formation and operation), real estate (residential and commercial), taxation (federal and state), and civil litigation (in connection with these practice areas). The law firm has offices and attorneys in Naples, Florida; Boca Raton, Florida; Danvers, Massachusetts; Waltham, Massachusetts; Quincy, Massachusetts; Manchester, New Hampshire and Salem, New Hampshire.