Special Needs Trusts For Disabled Children of Veterans

A military veteran and retiree can use up to 55% of his or her retirement pension to provide for his or her family after death. Under the Survivor’s Benefit Plan, a retiree can give up to his current income so that his or her family can receive a monthly stipend. While this is an excellent program, this type of situation can create problems if the retiree has a defendant disabled child. The stipend counts as income and could preclude a disabled child from receiving Medicaid. 

Therefore, Congressman Jim Moran proposed H.R. 4329, or the Disabled Military Child Protection Act, which provides long-term care for the disabled children of members of the armed forces. In addition, the law ensures that the stipend does not preclude a disabled child from receiving Medicaid. It does this by establishing a special needs trust for the child and transferring any benefits to the trust. Income from trusts are not considered to be available assets for Medicaid qualifications; therefore, the stipends cannot affect a child’s Medicaid qualifications.

See Bernard A. Krooks, Disabled Military Protection Act Allows Military Families To Include Special Needs Trusts Within The Survivor Benefit Plan, Forbes, Apr. 20, 2012.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.