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Should you give money to a person who receives public benefits?

On Behalf of | Sep 16, 2022 | Estate Planning |

Individuals who have serious illnesses and injuries are not often capable of working. Still, if you have a loved one who has some type of disability, you may be thankful for the public benefits he or she receives. After all, while these benefits are usually quite meager, they help your relative survive.

Because public benefits typically only cover basic medical care and living expenses, there is not much left over for home improvements, vacations, educational expenses or anything else. To improve your loved one’s quality of life, you may be thinking about giving him or her some money. Doing so, though, may be a disastrous idea.

Eligibility for government assistance

According to, there are many public programs at both the federal and state levels of government that provide critical assistance to needy Americans. To qualify for these programs, though, a person typically cannot have much income or very many assets.

Simply put, if you make a cash gift to your loved one, you may unintentionally push him or her over the income limit for the public benefits he or she currently receives. This could mean an end to public assistance for your loved one.

Financial help for your loved one

Even though you do not want to make your relative ineligible for government help, you still can be as generous as you want to be. Indeed, you can elect to form a special needs trust, which holds money for your relative’s benefit without transferring ownership of it to him or her.

Ultimately, this distinction allows your loved one to use your money for certain expenses while remaining eligible for needs-based benefits.