One number determines whether a disabled beneficiary keeps their government benefits or loses them entirely. That number is $2,000. Exceed it in countable resources by even one dollar, and SSI and Medicaid eligibility disappears. Most families don’t learn this until the damage is already done. Why a Direct Inheritance Can Do More Harm Than Good The instinct to leave money directly to a child with special needs comes from love. It also tends to backfire. When a parent names a disabled child as a direct beneficiary on a life insurance policy or in a will, that inheritance counts as a resource. A $400,000 payout lands in the beneficiary’s name, pushes them past the $2,000 threshold, and terminates their benefits on the spot. The family then faces the far harder work of rebuilding eligibility from scratch, with fewer options than they had before. A supplemental needs trust solves this before it starts. Assets held inside the trust don’t count toward that threshold. Bene...
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