Question: My brother has a severe handicap due to a birth defect. He has been receiving disability benefits through social security, as well as some state aid. When my parents die, if my brother inherits from my parent’s estate, will he be denied benefits due to the inheritance?
Answer: In most cases I have recommended that the parents set up a living trust using “handicapped” (Disability Benefits) language for the disabled child. This provides the disabled child supplemental care without loss of federal or state benefits and provides a better lifestyle. In addition, other children that are not disabled or handicapped can inherit their shares in a normal manner. There is no need to “disinherit” the disabled or handicapped individual.
In some cases a “Medicaid payback” trust may be used where the disability is the result of an injury or an accident and there is a sizeable insurance settlement that might reduce or eliminate Medicaid benefits. The theory is that the settlement dollars will be invested and the “payback” to Medicaid upon the death of the beneficiary will still leave a significant amount for the beneficiary’s heirs, siblings or others.
William “Bill” Brown, Attorney at Law
2999 E. Dublin-Granville Road
Columbus, Ohio 43231-4030