Will inheritance affect my son's DAC benefits? Special Needs Trust questions for Social Security
My 27-year-old son receives DAC (Disabled Adult Child) benefits based on my Social Security record. His stepmother just passed away last month and left him about $42,000 in her will. I'm trying to figure out if this inheritance will affect his benefits since he's on DAC and not SSI. Should the money go directly into his Special Needs Trust or would receiving this inheritance not matter since DAC doesn't have the same asset limits as SSI? I've heard conflicting information about whether inheritance affects SSDI-type benefits versus SSI. Any advice from those who've dealt with this situation would be greatly appreciated. I want to make sure we don't jeopardize his benefits.
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Javier Garcia
You're in luck - DAC benefits are based on the Social Security Disability Insurance (SSDI) program, not SSI. SSDI and DAC don't have asset limits, so the inheritance itself won't affect his benefits. SSI is the one with the $2000 asset limit. However, if the inheritance generates significant income (like interest or dividends), that could potentially impact benefits if it's substantial enough to be considered substantial gainful activity (SGA). That said, putting the inheritance in the Special Needs Trust is still probably a good idea for long-term planning and protection. It keeps the money available for his supplemental needs without complicating things if he ever needs to qualify for Medicaid or other means-tested programs in the future.
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NebulaNomad
•Thank you so much for the clear explanation! That's a relief to hear about the DAC benefits not having asset limits. The inheritance will probably just sit in a low-interest account or CD, so it won't generate much income. You make a good point about Medicaid though - he might need that in the future. I'll talk to our trust attorney about the best approach. This has been worrying me for weeks!
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Emma Taylor
sorry about your loss. My daughter got 30k from her grandma and we put it in her trust just to be safe. She's on SSDI not SSI too. Better safe than sorry is what our lawyer said
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NebulaNomad
•I'm sorry for your loss too. Thank you for sharing your experience. It sounds like we're in similar situations. I'm leaning toward putting it in the trust even if it's not strictly necessary. Did you have to report the inheritance to Social Security at all?
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Malik Robinson
While DAC benefits don't have asset limits like SSI, you should still consider several factors: 1. If he's receiving Medicaid, the inheritance could affect that eligibility 2. The Special Needs Trust protects the funds for his benefit while maintaining program eligibility 3. You should report the inheritance to Social Security regardless (transparency is always best) 4. Some states have different rules about how inheritance might affect various benefits I'd recommend consulting with a special needs attorney who specializes in this area. The rules can be complex and vary by state and specific situation.
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NebulaNomad
•Thank you for the detailed response. He is on our state's Medicaid waiver program for his home support services, so that's definitely something I need to consider. I'll make an appointment with our special needs attorney this week. Do you know if there's a specific timeframe I need to report the inheritance to Social Security?
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Isabella Silva
When my brother got an inheritance, we didn't put it in his special needs trust right away and it was a NIGHTMARE!!! Social Security didn't care but Medicaid terminated him and we had to reapply after putting everything in the trust. It took MONTHS to get his benefits back and the caseworkers kept giving us different information every time we called. One person said it was fine, next person said it wasn't. SO FRUSTRATING!!!
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Emma Taylor
•omg that sounds terrible! did he lose coverage during that time? my daughter needs her meds every month and I'd be terrified of losing coverage
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Isabella Silva
•Yes, we had to pay out of pocket for 2 months of medications and doctor visits. It was super stressful and expensive. Definitely don't risk it!
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Ravi Choudhury
I think your confusing DAC and SSI. DAC is based on work record like SSDI and doesn't care about assets. SSI is the one with the $2000 limit. But like others said the trust is still good idea for other benefits like food stamps and medicaid.
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Malik Robinson
•You're right that DAC benefits (like SSDI) don't have asset limits like SSI does. However, I think the concern about Medicaid is still valid, as many people receiving DAC benefits also qualify for Medicaid, which does have asset limits in most cases. So while the DAC payment itself wouldn't be affected by an inheritance, other benefits might be.
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CosmosCaptain
Have you tried calling Social Security? I've been trying to reach them about my daughter's benefits for TWO WEEKS and can't get through. Either busy signals or they disconnect after being on hold for 45+ minutes. This system is broken!
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Freya Johansen
•I had the same problem trying to reach SSA about my retirement benefits last month. After multiple failed attempts and hours on hold, I found a service called Claimyr (claimyr.com) that helped me get through. They have a system that calls and waits on hold for you, then connects you when an agent answers. Saved me hours of frustration. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU
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CosmosCaptain
•Thanks for the tip! I'll check it out. Anything is better than listening to that hold music for another hour just to get disconnected.
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NebulaNomad
I want to thank everyone for their helpful responses. I've decided to meet with our special needs attorney this week to discuss putting the inheritance into my son's trust. While his DAC benefits may not be affected, I don't want to risk his Medicaid coverage which he needs for his support services. I'll also report the inheritance to Social Security as recommended. It's such a relief to get clarity on this!
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Javier Garcia
One more thing to keep in mind: if your son's stepmother had a retirement account like a 401(k) or traditional IRA that was part of this inheritance, the distributions could count as income in the month received. That's different from the lump sum cash inheritance. Just something to discuss with your attorney to make sure all bases are covered.
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