Benefits such as Supplemental Security Income (SSI) or Medicaid can be a financial lifeline for your family if you have a child with special needs. However, a divorce may impact these benefits.
You can take steps to protect these benefits during the divorce process. Doing so requires careful attention to child support, alimony, and asset division to avoid jeopardizing your eligibility for assistance with your child’s care.
Understanding how income affects special needs benefits
Many special needs benefits, such as SSI and Medicaid, have strict income and asset limits. If your child relies on these plans, even small changes in income could cause a loss of eligibility. That’s why you should know which resources count toward resource limits. For example, receiving too much child support or alimony can increase your child’s income, making them ineligible for SSI.
To avoid this, consider setting up a special needs trust to manage financial support in a way that protects eligibility for government programs. That’s because money in a trust does not count as income or assets. Then, you can provide for your child’s essentials without affecting their ability to receive public benefits.
Keeping your child’s future in mind
Though divorce changes many aspects of your life, protecting your child’s future remains a priority. Along with financial planning, work with your ex-spouse to create a plan that focuses on your child’s long-term care.
This involves deciding who manages the trust and when that responsibility should transfer to someone else. You likely also need to specify in writing how you will handle medical decisions. Clarifying these issues early on prevents disputes down the line, especially when a quick decision may be necessary during an emergency.
By planning carefully, parents can ensure that their child continues to receive the support and care they need, even after the family’s structure changes.