Social Security Disability &
  Special Needs Planning News
 Sheri R. Abrams, Attorney at Law
In This Issue:
Can I Give More than $15,000 a Year to My Loved One with Special Needs?
Don't Forget To Switch from SSI Benefits to Disabled Adult Child Benefits
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Source: Reprinted from the February 2018 Newsletter of Sheri R. Abrams, Attorney at Law,


Issue: #107

 February 2018

February has been a month of celebration for me. It's my birthday month, and more importantly, my son Andy has finally become an Eagle Scout!   I am so incredibly proud of him and how hard he's worked to achieve his goals.  Here is a picture I snapped from his Eagle Board of Review.

Our office building got a pretty cool upgrade this month.  We had an "Evac Chair" installed, which is something that I think all companies, especially those who work with people with disabilities, should have in place.  In the event of an emergency (fire, power outage, etc.) it helps people with mobility issues to quickly and safely get down the stairs and out the door so they don't become trapped in the building.  You can learn more about the "Evac Chair" at .

Finally, there's been some changes to the tax laws that are causing unnecessary confusion as it relates to Special Needs Planning. The annual gift tax exclusion was raised from $14,000 to $15,000 in 2018, but that is not meant to be a limit on how much you can donate to someone with a disability!  As you will learn in the feature article below, you don't have to worry about this threshold unless you give away $5.6 million as an individual or $11.2 million as a married couple over your lifetime.

So, for the most part, feel free to donate to a loved one with special needs without fear of taxes.  What you may need to worry about, however, is how those donations are transferred to your loved ones and how they may affect their public benefits.  Again, more about that below.

Have a great month,


Can I Give More than $15,000 a Year to My Loved One with Special Needs? 

The federal gift tax exemption results in one of the most misunderstood concepts of special needs planning - how much you can give to your loved one with special needs. That is because the gift tax is incredibly complicated!  Most people don't understand the nuances of this tax and believe that you can only give away $15,000 to a person in each calendar year without being taxed.

This is not true. You can fund a Special Needs Trust for a person with disabilities with a lot more than $15,000 per year.

The Basics of the Gift Tax:

The federal gift tax is a tax on the giver of a gift, not the recipient, but it only applies once the donor has made more than $5.6 million dollars worth of taxable gifts during his or her lifetime.  (This figure increases to $11.2 million if you opt to give as a couple.) So, if your total taxable income is not worth more than $5.6 million, and if you don't expect to give away that amount over your lifetime, then in all likelihood the gift tax will never apply to you.  

Actually, the $15,000 limit that you often hear about is the annual exclusion amount that a donor can give to any one person during the calendar year without having to file a gift tax return declaring the gift.  Since you don't have to file a gift tax return for gifts under the $15,000 limit ----these don't count toward your $5.6 million lifetime gift total.

What Does This Mean For Special Needs Trusts?

A contribution to a Special Needs Trust does not trigger the requirements of the annual tax exemption unless the trust beneficiary has certain withdrawal rights (called "Crummey" powers).  However, most Special Needs Trusts are not created in this way, as doing so would cause  ineligibility for public benefits.

While it may be a relief to learn that you can give more than the $15,000 annual exemption to a person with special needs, you most certainly need to consider how that gift is transferred to your loved one and what it could do to his or her public benefits.  If you are not giving this money into a Special Needs Trust, please tread carefully and get the advice of a qualified Special Needs Planning attorney before making any transfers.

If you need help determining the best options when transferring money to a person with special needs, please call the office to schedule an appointment.

Don't Forget To Switch from SSI Benefits to Disabled Adult Child Benefits

A person receiving Supplemental Security Income (SSI) because of a disability normally has not worked long enough to qualify for Social Security Disability Insurance (SSDI) benefits on their own work record. 

You might assume, therefore, that this person can never receive SSDI benefits in the future.   But this is not always the case.  In fact, many people who receive SSI benefits and who became disabled before age 22 can switch to a form of SSDI benefits when one of their parents retires, becomes disabled or passes away. 

People receiving SSI benefits (and anyone else, for that matter) can qualify for Disabled Adult Child (DAC) benefits if:
-----they became disabled prior to age 22;

-----one of their parents paid into the Social Security system for the required number of quarters;  


-----that parent dies, retires or becomes disabled.

When the parent retires or becomes disabled, the child will receive 50 percent of the parent's Social Security benefit, and if the parent dies the payment is increased to 75 percent of the parent's benefit.   This additional benefit causes no reduction in the parent's Social Security benefit.

Under this program the disabled adult child is only able to draw DAC benefits from one parent at a time----this would be the higher amount.

To receive this benefit, the disabled adult child must be single or married to another person who is also receiving DAC benefits.

When a person starts receiving an SSDI payment, those additional funds will normally cause the person to lose their SSI benefits if the amount that they receive from their parent's work record is greater than their current SSI benefit amount.

Fortunately, under something called the "Pickle Amendment" the receipt of additional SSDI funds does not cause the disabled adult child to lose their Medicaid eligibility that would normally result from a loss of SSI benefits. 

In addition, after the disabled adult child receives two years of SSDI benefits, they will also begin to receive Medicare benefits.

It is important in order to ensure receipt of the DAC benefits that the parent informs Social Security that they have a disabled child when they apply for Social Security for themselves and have someone in the family report when the parent passes away. 

Free Download of Sheri Abrams' Book "Don't Gamble With Your Social Security Disability Benefits"

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Oakton, VA 22124
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If you know of someone who could use our legal services, please forward to him/her this e-mail newsletter or give him/her our telephone number: (571) 328-5795.


We provide legal services in the areas of Social Security Disability Law, Special Needs Planning, Elder Law, Estate Planning, Special Needs Trusts, Wills and Trusts, Powers of Attorney, Advance Medical Directives (Living Wills), Guardianship, Conservatorship, Disability Planning and Student Loan Discharge. 
If you, or someone you know, is involved with an educational event or support group that would benefit from a presentation on any of the areas of law for which we provide legal services, please call us at (571) 328-5795.