Thought for the Day” #1256 – by Stephen R. Elville, J.D., LL.M.

June 10, 2019

“Another common mistake when administering a special needs trust is reimbursing with cash or distributing money directly to the SNT beneficiary. Any money the trustee gives to the beneficiary directly is “unearned income” to the beneficiary under the SSI rules. After a set-aside of the first $20 each month (general income exclusion), these cash payments reduce the SSI recipient’s benefits dollar-for-dollar. In other words, the trustee should never distribute cash directly to a beneficiary who is receiving SSI. The correct procedure is to pay vendors directly for goods and services in order to avoid the dollar-for-dollar reduction or to reimburse third parties for expenditures they make on behalf of the beneficiary.” #elvilleeducation