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Los Angeles County Special Needs Lawyer: Protecting Benefits with a Special Needs Trust

Many people have questions about whether they can still receive government benefits after coming into an inheritance. The simple answer is yes, but there is a significant amount of planning that must occur to protect both the benefits and the inheritance, which usually involves the creation of a special needs trust. While inheritances placed in a special needs trust are often protected, the protection of benefits depends on the type of benefits are being received.

Social Security Disability Insurance (SSDI)

SSDI is a federal benefit meant to help those with disabilities. Individuals can receive SSDI if their disability renders them completely unable to work and if they have paid into Social Security over a certain period. Exceptions are if the individual is under age 22 and if one or both parents have paid into Social Security and are themselves disabled, receiving Social Security benefits, or have already passed away.  If the individual can earn an income money through employment, then they are often disqualified from receiving the SSDI benefit. However, income received from other sources, such as an inheritance, does not automatically disqualify them from receiving the SSDI benefit. Since SSDI is not a need-based benefit, a special needs trust would not be needed to protect the inheritance or the benefits.

Supplemental Security Income (SSI)

SSI is sometimes confused with SSDI since they both give benefits to individuals with special needs, however, they are actually two very different programs. One main difference is the fact that very strict income requirements are placed on SSI beneficiaries, and any income above a certain threshold automatically disqualifies the individual from receiving benefits. Since SSI is a need-based program, it is possible to protect inheritances for individuals with special needs using a special needs trust. However, the use of a special needs trust depends on the circumstances of the individual’s situation.


Medi-Cal is a federal health insurance program administered by the state of California to help those with little or no income, including people with disabilities or special needs. Medi-Cal is a need-based program with very strict financial limits placed on the recipients; in addition to income limits, recipients must also have limited assets in their name. Once again, a special needs trust may be a viable option to protect an inheritance while still receiving Medi-Cal benefits.

If you have questions about protecting benefits or an inheritance with a special needs trust, or if you’d like to have your current situation reviewed to determine the best way to protect assets and receive benefits, please set up an appointment at our San Fernando Valley special needs and elder law office by calling (818) 905-6088.