EQUITY Responds: WID Answers Your Questions
Q- Several years ago, as the result of a judicial award, a special needs trust was set up for me as a beneficiary. Since then, I have been working full time and progressing in my career. Even if I were to lose my job because of my disability, I would not go back on SSI. Instead, because I have accumulated enough quarters with the Social Security Administration, I would qualify for Social Security Disability Income (SSDI). SSDI does not have an asset test, so I am thinking of just liquidating my trust through the courts and taking the proceeds. Can I actually do this, or is there a better way to use the small amount of remaining money in my trust?
A- Firstly, congratulations on what sounds like quite a career success story. Acquiring enough quarters to qualify for SSDI is also an accomplishment and makes benefits planning much simpler. As you indicated, SSDI recipients are not subject to an asset limitation. Even Bill Gates could qualify for SSDI.
Since you do not have the asset limit consideration, you could simply liquidate the trust. However, beware that your state may have the right to medical reimbursement for having covered your Medicare expenses while you were on SSI. You do not indicate how long you were on SSI and receiving Medicare, but reimbursement expenses can add up quickly. This amount could possibly absorb the remainder of your trust.
Another approach is to allow the trust to continue. Trust assets could be used to supplement or improve your lifestyle to pay for the sort of things laid out in the trust document.
Of course, Access to Assets thinks you could use the money to help build a financial future. Perhaps the trust could provide a piece of adaptive equipment to assist you in your professional development.
Another option would be to max out your retirement contributions to qualified accounts, and depend on the trust to pay for other expenses. Lastly, do you want to start a small business, buy a house, go back to school? Just try to use this resource to leverage further assets and build your financial future.