Military service members can elect for a portion of their retirement pay to continue to be paid to their spouse and/or children after the service member’s death through the Survivors Benefit Plan (SBP).
If these funds are left directly to a disabled child however, the child could lose access to important government services by disqualifying them for needs-based programs, such as Supplemental Security Income (SSI) and Medicaid. Even if the family has the means to provide for the child financially during the child’s lifetime, there are community programs such as case management, home health care, and respite care that are valuable resources to families with special needs children, but are not available without Medicaid qualification.
A recent change now allows the service member to assign SBP payments to a properly drafted Special Needs Trust (SNT), rather than naming a child with special needs directly as the beneficiary. SNTs allow funds to be held for the benefit of a disabled child and used for their supplemental care while still allowing the child to qualify for critical benefits.
Military members and retirees with disabled children should take advantage of this important policy change as soon as possible. Begin by consulting an experienced special needs planning attorney to establish a proper SNT or to review a current SNT to ensure it meets policy requirements. The attorneys of ShounBach can help.