Will Making an Estate Plan Affect Your Government Benefits?

If you are starting to make an estate plan – or thinking about it – then you might worry that the plan will affect your government benefits. Depending on how you set up your estate plan, it could matter when it comes time to receive benefits.

How Might an Estate Plan Matter for Getting Government Benefits?

As you probably know if you already receive government benefits, eligibility for some programs depends on the recipients’ income or “resources”. These programs include Social Security, Medicare, Section 8 housing, food assistance, and other state and local programs. If you earn too much money or have too many valuable assets, you could lose your benefits.

Estate plans can inadvertently jeopardize your eligibility for government benefits. For example, a trust that you create might give you income well into retirement, but the assets held by the trust would raise your income above the limit to receive medical benefits.

Estate plans also can help if you need the benefits. You might begin having medical problems that prevent you from working, but you have too much cash on hand to qualify for government assistance. Using proper planning devices such as a special needs trust or organized lifetime giving, you could reduce your cash to the point that you can qualify.

Working on Your Estate Plan

As you work on your estate plan, factor in your government benefits or plans to apply for them. You might have heard of tactics such as a Medicare “spend down”. Your estate planning attorney can advise you as to creating an irrevocable trust to hold some of your assets for family members. There are other estate planning techniques available to protect benefits eligibility too.

Also consider your relatives’ need for government benefits. If you plan to make gifts to family members with special needs, you should consider setting up a special needs trust rather than giving them the gifts directly. This can prevent an inadvertent disqualification from getting government benefits.

Want to start planning your estate and worried about benefits? Local attorney Andrew Szocka, Esq. provides thorough and speedy estate planning help in the Chicagoland area. To schedule a free initial consultation, visit the Law Office of Andrew Szocka, P.C. online or call the office at (815) 455-8430

The owner of this website has made a commitment to accessibility and inclusion, please report any problems that you encounter using the contact form on this website. This site uses the WP ADA Compliance Check plugin to enhance accessibility.