Q: What are the legal rights of someone with disability collecting an inheritence?
A:
The same as anyone else. However, I assume that what you are really asking is whether someone who gets SSDI or SSI can receive an inheritance.
The answer is it depends on what type of benefits the beneficiary gets. If the beneficiary is on SSDI, there is no problem. SSDI or any other disability is awarded because the person cannot work for whatever reason. There is no prohibition on what assets the can have. SSI is different. SSI is given to people whose income/assets are very low. There is a maximum level of assets that a person can have and receive SSI. If a beneficiary gets an inheritance and exceeds this amount, then the SSI will cease and any overpayments will have to be refunded. For more on this, ask the SSA (www.ssa.gov) for the income thresholds if you are receiving SSI.
If a beneficiary is disabled and getting such assistance, the person making the will or trust could have avoided this by setting up a special needs trust. The special needs trust must meet certain qualifications and should therefore be drafted by a lawyer. With a special needs trust, the beneficiary can continue receiving SSI or any other government benefit. However, the special needs trust can provide for other things that would be of benefit to the beneficiary and make his/her life more comfortable. With a special needs trust, however, the beneficiary does not receive an inheritance. He or she only gets funds that a trustee chooses to disburse as per the terms of the trust.
A beneficiary who is disabled and receives an inheritance can also set up their own special needs trust. This too should be drafted by a lawyer as it must contain certain language in which the beneficiary agrees to reimburse Medicare from the trust.
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