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Revocable Trust Containing Minor Child’s Assets or Lawsuit Settlement Causes Loss of SSI When Child Becomes Adult

August 16, 2010

In the case of Hunt v. Astrue, the U.S. District Court for the District of Massachusetts reviewed a case where a revocable special needs trust had been established by parents of their injured child.  The funds in the trust had been received in the settlement of a personal injury case filed on behalf of the child when he was a minor, and the child could revoke the trust.  Because of the way the trust was established, the child ended up being disqualified from SSI when he became an adult.

If the special needs trust had originally been made irrevocable (not revocable) with explicit provisions to supplement but not supplant governmental benefits, the trust would likely have been of greater long-term benefit to the disabled child.  To allow the child to be eligible for SSI, the trust would also have required restrictions on payments directly to the child and restrictions involving expenses for the child’s food and shelter.

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