Guest guest Posted January 17, 2012 Report Share Posted January 17, 2012 My daughter starts a new full time position next week. I understand what the details are concerning work credits, SSI eligibility and Medicaid eligibilty. One of the benefits is a 401K plan. Can we title the plan in her Special Needs Trust so she and her employer can contribute; therefore effectively not having to deal with the $2,000.00 asset rule? Quote Link to comment Share on other sites More sharing options...
Guest guest Posted January 17, 2012 Report Share Posted January 17, 2012 It isn't clear from your question if you are asking if 401K funds can be deposited in a 3rd party special needs trust that you have provided for your daughter's future inheritance or the OBRA'93 qualified special needs trust also known as a " payback trust " which can be funded by assets that belong to your daughter. If a 3rd party trust, you can never comingle assets that your daughter has a legal right to or ownership interest in with a 3rd party special needs trust. If you commingle your daughter's assets with a 3rd party trust, the entire trust is sabotaged and treated as an available resource.  Unfortunately 401 K funds cannot be placed even into a payback special needs trust while your daughter is employed.  These funds must be held in a 401K account under your daughter's own social security number and may affect her eligiblity for standard medicaid but not for Heath Care Benefits for Working Disabled.  HCBWD protects assets held in an IRA or 401K funds until your child reaches age 65. Unfortuantely if the assets are still in her name at that time, she will be ineligible for Medicaid at age 65. You may want to cash out her 401K benefits after the age of 59 1/2 and pay the taxes due at the time of withdrawal and deposit the remaining funds into a " Payback " Special Needs trust - assuming that option is still available when your child reaches 59.  I will be giving an Arc of IL sponsored  presentation at Blue Cap in Blue Island, IL on 1/27/2012 on this and other related topics. You may want to contact the Arc of IL for more information if you are interested in attending or wish a copy of the handouts I'll be using. Terrie Varnet ________________________________ From: " cpropheter@... " <cpropheter@...> IPADDUnite Sent: Tuesday, January 17, 2012 9:33 AM Subject: 401K  My daughter starts a new full time position next week. I understand what the details are concerning work credits, SSI eligibility and Medicaid eligibilty. One of the benefits is a 401K plan. Can we title the plan in her Special Needs Trust so she and her employer can contribute; therefore effectively not having to deal with the $2,000.00 asset rule? Quote Link to comment Share on other sites More sharing options...
Guest guest Posted January 17, 2012 Report Share Posted January 17, 2012 Congrats to your daughter on the new job! I've read 's answer, and I'd like to add a different thought-- Keeping assets below $2K is only an issue if your daughter is going to need SSI now or in the future. (It doesn't affect SSDI or other things.) If she has a full time job, she's earning more than the SSI monthly amount. If it looks like she's full-time employable for years to come, then staying eligible for SSI might not be necessary. My son is in that position, and we've been shifting our mindset from " spend that SSI money so the assets stay low " to a money philosophy more like the rest of us ( " Save for a rainy day " ). Is your daughter done with school & transition? Is this a temporary, seasonal, or short-term position? (If the answer to either is yes, I'd modify my opinions.) If she's done with education and this is a Real Full Time Job with long-term potential, then I'd say take the 401K. It'll take a long time before that's worth $2K anyhow. -Gail ________________________________ From: " cpropheter@... " <cpropheter@...> IPADDUnite Sent: Tuesday, January 17, 2012 8:33 AM Subject: 401K My daughter starts a new full time position next week. I understand what the details are concerning work credits, SSI eligibility and Medicaid eligibilty. One of the benefits is a 401K plan. Can we title the plan in her Special Needs Trust so she and her employer can contribute; therefore effectively not having to deal with the $2,000.00 asset rule? Quote Link to comment Share on other sites More sharing options...
Guest guest Posted January 17, 2012 Report Share Posted January 17, 2012 Hi Gail, I too agree that often the job is more important than the SSI benefits. My advice was limited to the ability to use a special needs trust to shelter the assets. Fortunately, the more important asset which is Medicaid can be protected thanks to the new Health Care Benefits for Working Disabled which does not deem assets in a qualified fund until age 65. The decision to save in a 401K or preserve eligibiility for SSI is a personal one with no specific right or wrong answer. One must do what one feels is best in the long run for their child. As you wisely pointed out, there are a number of variables that would change the planning. Terrie ________________________________ From: G Mrozak <mrsovaltine@...> " IPADDUnite " <IPADDUnite > Sent: Tuesday, January 17, 2012 11:15 AM Subject: Re: 401K  Congrats to your daughter on the new job! I've read 's answer, and I'd like to add a different thought-- Keeping assets below $2K is only an issue if your daughter is going to need SSI now or in the future. (It doesn't affect SSDI or other things.) If she has a full time job, she's earning more than the SSI monthly amount. If it looks like she's full-time employable for years to come, then staying eligible for SSI might not be necessary. My son is in that position, and we've been shifting our mindset from " spend that SSI money so the assets stay low " to a money philosophy more like the rest of us ( " Save for a rainy day " ). Is your daughter done with school & transition? Is this a temporary, seasonal, or short-term position? (If the answer to either is yes, I'd modify my opinions.) If she's done with education and this is a Real Full Time Job with long-term potential, then I'd say take the 401K. It'll take a long time before that's worth $2K anyhow. -Gail ________________________________ From: " cpropheter@... " <cpropheter@...> IPADDUnite Sent: Tuesday, January 17, 2012 8:33 AM Subject: 401K  My daughter starts a new full time position next week. I understand what the details are concerning work credits, SSI eligibility and Medicaid eligibilty. One of the benefits is a 401K plan. Can we title the plan in her Special Needs Trust so she and her employer can contribute; therefore effectively not having to deal with the $2,000.00 asset rule? Quote Link to comment Share on other sites More sharing options...
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