Roy B. Oser, Esq.

Children are “hostages to fortune,” which I have always taken to mean that they are the source of the greatest joys but also of the greatest sorrows (though Francis Bacon meant something quite different). One of the greatest of these sorrows may be the disability of a child or grandchild that will make it impossible for that child to be self-supporting as an adult. Parents and grandparents may feel inclined to make generous bequests in their wills to an adult disabled child, but that could do more harm than good, and there is a better way.

Similarly, parents and grandparents may want to help a young child build up a large bank balance by making cash gifts over the years, or bestowing other financial assets. In a small percentage of cases, however, tragedy strikes and, for example, a young adult has a psychotic break, and is diagnosed with chronic schizophrenia – late adolescence or early adulthood appears to be the most likely time for this to occur. An inheritance or a bank account or other financial assets may make that adult disabled child ineligible for Supplemental Security Income (SSI), a federal benefit administered by the Social Security Administration, and, therefore, for Medicaid.

The appropriate thing to do may be to establish a trust for the benefit of a child, so long as it is the right kind of trust. A lawyer can advise you on the specifics, in light of your particular circumstances and goals. For adult disabled beneficiaries in particular, parents or grandparents may want to establish a trust known as a supplementary needs trust. Such a trust is designed to enable someone (the “grantor”) to provide the beneficiary with benefits that would not be provided under SSI or Medicaid, and to do so without making the beneficiary ineligible for these governmental programs.

An adult disabled child living at home may be able to qualify for SSI and Medicaid, but some families of mentally ill adults find it preferable for them to be housed separately under a program that would be able to provide them with a social structure and other benefits that the family is not in a position to provide. For mentally ill young adults there are hospital-sponsored and other programs that would serve this purpose. Such programs help mentally ill adults to work toward being able to live independently, starting with living arrangements that are independent in varying degrees. The programs are also likely to provide sheltered work opportunities and medical and counseling services.

The costs of such programs, and of the occasional hospitalizations that may be necessary for a mentally ill adult, are beyond the ability of most families to pay, so that eligibility for SSI and Medicaid will be required. Even if the adult disabled child is eligible for these governmental benefits, however, and is enrolled in such a program, a family may want to have some funds in reserve for emergencies, or to meet needs of that disabled adult that would not be met by the program.

The age of an adult, for the purpose of SSI eligibility, is 18 or over, and an individual 18 or over is “disabled” for this purpose if he or she has a physical or mental impairment that is medically determinable and which (1) results in the inability to engage in any substantial gainful activity; and (2) has lasted or can be expected to last for a continuous period of not less than 12 months (or result in death). Definitions, including of “substantial gainful activity” and other details about eligibility for SSI, including any income or resources of a disabled adult that would be taken into account, are available in materials obtainable at your local Social Security office and on the Social Security web site (see, in particular, the information at www.socialsecurity.gov/ssi/text-eligibility-ussi.htm).

And, of course, a lawyer can advise. The point to remember is that gifts to an adult disabled child may make that individual ineligible for these benefits.