Sheri R. Abrams, P.C., Attorney at Law
Social Security Disability &
  Special Needs Trusts News from
 Sheri R. Abrams, P.C. Attorney at Law
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In This Issue
Stimulus Payments to Social Security Recipients to Arrive in May
The Problem with Extra Income and SSI Eligibility
Should You Update Your Will When You Move to Another State?
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Issue: # 9 April 2009
Picture of Social Security Card and Dice

Welcome to the ninth edition of our newsletter.  In these monthly newsletters we will be showing you how not to gamble with your or your patients/clients Social Security Disability and/or SSI benefits.  We will also be providing you with useful information on Wills, Living Wills, Powers of Attorney and Special Needs Trusts.
Stimulus Payments to Social Security Recipients to Arrive in May
American Flag
As part of the American Recovery and Reinvestment Act (aka the stimulus bill), Congress has authorized one-time $250 payments to most Social Security, Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) beneficiaries.
Checks to those who were eligible for benefits under the programs during November or December 2008 or January 2009 will begin hitting the mail in early May and continue through the month.

According to the Social Security Administration (SSA), the payments will be distributed to beneficiaries in the same manner that they currently receive their benefit (either by check, debit card, or direct deposit) but the payments will not be included in the same transaction as a beneficiary's regular monthly payment. This means that beneficiaries should be on the lookout for two separate payments during May.

People with special needs who receive both SSDI and SSI benefits will receive only one $250 payment, and SSDI beneficiaries under age 18 (or 19 if they are still in school) will not receive any payments at all. However, anyone receiving a payment does not have to worry about the additional income affecting his government benefits - the stimulus payments do not count as "income" for either program, and will not count as an available resource for nine months following receipt of the funds.
For more information on Social Security Disability and SSI please click here.
The Problem with Extra Income and SSI Eligibility
social security form
With the current recession affecting nearly everyone in one way or another, most people would jump at the chance to earn additional income or to receive a large cash gift from a friend or relative.
But for Supplemental Security Income (SSI) beneficiaries, extra income sometimes causes more problems than it's worth. That's because SSI recipients must follow very strict rules regarding how much income they can receive in any given month. If a beneficiary's income goes over his allotted SSI award, he could lose not only his SSI eligibility, but also the all-important Medicaid assistance that often comes with it.

The Social Security Administration (SSA), the agency responsible for administering the SSI program, has a unique definition of income: "any item an individual receives in cash or in-kind that can be used to meet his or her need for food or shelter."  This means that a beneficiary's wages are income (luckily, the SSA only counts $0.50 of each $1.00 of wages as income), as are any cash payments, or cash equivalent items like gift cards, that are given directly to a beneficiary by anyone or anything, including a trust. While a beneficiary is on SSI, his/her monthly income must be lower than the amount he/she receives as an SSI benefit.  If the beneficiary's income goes over this limit, even by one dollar, he/she loses SSI, at least temporarily.

Family members who have not consulted with an Attorney who is familiar with these issues generally learn about these restrictions the hard way. One of the most common scenarios involves a well-intentioned friend or relative giving a person with special needs a large cash gift, typically on a holiday or birthday, that cancels out the beneficiary's SSI award.
Fortunately, the SSA has a specific rule, called the "Infrequent or Irregular Income Exclusion," that allows for small gifts to SSI beneficiaries.

Here's how this rule works: During each quarter of the year, the SSA does not count the first $60 of a beneficiary's infrequent or irregular unearned income, or the first $30 of a beneficiary's earned income against his SSI award. The SSA defines infrequent income as any payment received from a single source that a beneficiary did not receive in the month before the payment and will not receive in the month after the payment.  For example, if a beneficiary gets $30 in July for helping to paint a house, but does not do the work in June or August, the $30 counts as infrequent earned income. Irregular income is any income a beneficiary cannot reasonably expect to receive. In this case, if a friend of the beneficiary gives him $50 "just because," that $50 counts as irregular income.

In both the house painting example and the gift giving example, SSI would not count the payments as income because the payments fall under the Infrequent or Irregular Income Exclusion. However, if the beneficiary does not spend the funds during the month in which they are received, any remaining money counts as an available resource in the following month, creating a separate problem for the beneficiary, who must keep assets under $2,000 in order to qualify for SSI.

Clearly, $60 each quarter is not a lot of money. But for SSI recipients, who have to deal with many different financial requirements, every little bit helps. Of course, there are other, much less restrictive ways to help an SSI recipient with his daily needs, often through the use of a Special Needs Trust.  An Attorney can help you navigate the tricky world of SSI rules and propose solutions that can make an SSI beneficiary's life much easier.

For more information on Special Needs Trusts click here.
Should You Update Your Will When You Move to Another State?
Among all the changes you must make when you move to a new state - driver's license, voter registration - don't forget your will.
While your will should still be valid in the new state, there may be differences in the new state's laws that may make certain provisions of your will invalid. In addition, moving is a good excuse to consult an attorney to make sure your estate plan in general is up to date.  Property laws can vary from state to state. It is especially important to have your estate plan reviewed if you move from a common law state to a community property state (Arizona, California, Idaho, New Mexico, Louisiana, Washington, Nevada, Texas, Wisconsin, and Alaska) or vice versa.
In a common law state each spouse's property is owned individually, while in a community property state, property acquired during the marriage is considered community property. In addition, states may have different rules about when co-owned property may pass to the surviving owner and when it may pass under the will.  Other things to consider are whether there is any language you can add to the will to make it easier to probate in the new state and whether your executor still makes sense based on your new location. Other pieces of your estate plan may need updating as well. For example, the state may have different rules for powers of attorney or health care directives.
For more information on Wills, Living Wills, & Powers of Attorney please click here.
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Our law office is located in the "Old Town
Fairfax Building," formerly known as the "Jesse Building."
                        4015 Chain Bridge Road
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We are right across the street from the Courthouse in Fairfax City, Virginia.
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We provide legal services in the areas of Social Security Disability Law and prepare Wills, Special Needs Trusts, Living Wills, Health Care and Financial Powers of Attorney for clients in Virginia, DC and Maryland, and we are always happy to provide FREE friendly phone advice.
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If you, or someone you know, is involved with an educational event or support group that would benefit from a presentation on Social Security Disability Law, Wills, Living Wills, Powers of Attorney or Special Needs Trusts, please call us at (703) 934-5450.