Pursuing Peace Of Mind For You And Your Family

Does your gift make a loved one ineligible for public benefits?

If you have close family members and friends, you may want to pass some of your prosperity onto those who matter most to you. By creating a comprehensive estate plan, you leave no doubt about which of your loved ones you want to receive your assets.

You always have the option of gifting cash or other assets to anyone, of course. If you have a relative who has a disability or other special needs, though, you have an additional matter to consider. Specifically, you must investigate whether your gift may make your loved one ineligible for public benefits.

Public benefits have income limits

According to the U.S. Bureau of Labor Statistics, approximately 20% of American families receive financial assistance through one or more means-tested public programs. To qualify for these programs, a person must prove he or she has limited income and assets.

Simply put, acquiring new wealth may force a recipient over the income threshold, resulting in his or her loss of government aid.

Your gift may do more harm than good

While a small gift is not likely to make much difference, giving your loved one too much may do more harm than good.

Remember, the income limits for Supplemental Security Income, Medicaid and many other means-tested government programs are almost unconscionably low. Before you give cash or other assets to a person who either receives or intends to receive government benefits, you should familiarize yourself with the income limits for specific programs.

Ultimately, you may need to set up a special needs trust or use other estate planning tools to ensure your loved one continues to qualify for financial assistance after receiving your generous gift.