Legal Question in Wills and Trusts in Alabama
inheritance and SSI
My sister receives disability (SSI?). Our mother is re-writing her will and wants me to receive both my portion and my sister's portion of the assets upon Mother's death -- with the understanding that I am to dole out my sister's share of the money to her according to her needs. My sister has a history of not managing finances well, and I don't want to be holding the purse strings, as she probably will badger me constantly for money. When hers is spent, she probably will expect me to subsidize her SSI out of my pocket, just as Mother has done for years. Is there a way for my sister to receive an ''allowance'' from her part of the inheritance without jeopardizing her disability income? Can Mother write the will so that my sister's part goes into a trust or something -- managed by someone other than me? We have no other relatives and not any close friends so this would have to be an independent manager, to whom my sister would have to appeal when she needs money. That would leave me out of the middle but is this possible, while allowing my sister to continue receiving her disability check?
Thank you for any help.
2 Answers from Attorneys
Re: inheritance and SSI
It is probably wise to not hold those assets for your sister (as you would be the legal owner of those funds and they would not be protected for your sister's benefit). There is a concept in the law known as a "special needs trust," and it allows an individual to place assets in trust for the benefit of someone (who is receiving government benefits) without jeopardizing the beneficiary's eligibility for those benefits. The trust assets could be used to supplement the person's life and provide for those things over and above what might be provided for by government care (such as non-covered medicine, treatments, etc.). I would encourage your mother to consider including a trust for your sister in her Will. Special needs trusts are quite technical, so it might be best to name a third party professional or a bank as the Trustee. Good luck!
Re: inheritance and SSI
Jack is correct about the Special Needs Trust being the right tool for the job. Banks don't want trust business unless you have a million dollars to invest, so I strongly recommend the Alabama Family Trust. Do a web search- they are in Montgomery and their mission is to hold special needs trusts for individuals like your sister plus they have a much lower minimum trust size than banks do.
William G. Nolan
Nolan Elder Law LLC
www.NolanElderLaw.com
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