When creating a trust, you need to take various factors into consideration, such as going over different types of trusts and the pros and cons of each option. If you receive supplemental security income (SSI) or plan on applying for SSI in the future, it is important to understand how a trust could potentially affect your benefits.
By identifying the best course of action, you can safeguard your financial future.
A trust can reduce SSI benefits
According to information from the Social Security Administration, trusts can affect SSI benefits in different ways. In some instances, assets one receives from a trust counts as a resource, which could potentially reduce SSI benefits. In addition, you could lose your eligibility for SSI benefits as a result of assets in a trust.
When it comes to SSI benefits, all assets in a revocable trust count as a resource. With an irrevocable trust, the part of the trust that you could receive a payment from counts as a resource.
Some trusts do not impact SSI benefits
It is essential to understand that pooled trusts and special needs trusts are an exception, and assets in these types of trusts do not count as resources or affect SSI benefits. Furthermore, the program does not count a trust if doing so causes undue hardship, so long as you satisfy certain criteria.
Whether you want to create a special needs trust, set up a pooled trust or understand how your trust could have an effect on SSI benefits, it is pivotal to review your estate planning options closely.