Question: My spouse and I have settled our divorce. Our special needs child, now age 14, will receive $2,100.00 per month of child support until she is age 21. She is developmentally disabled. She will need her to keep her current Medicaid and when she is age 18. Is there a solution to keep the child support and Medicaid and future eligibility for SSI?
There is a legal solution in NYS for protecting public benefits such as Medicaid (and SSI) while your child is a minor and when she is 18, and until the child support payments end at age 21.
NYS permits a parent to establish a supplemental needs trust (SNT) and to serve as trustee of the trust. When the funds for the trust belong to the child – like child support – this is called a pay back SNT.
It’s critical that the divorce stipulation of settlement state that the child support is irrevocably assigned to the trust and that the judge order this type of ‘relief’. This means that the parent, guardian nor a government agency has the legal authority to change or re-direct the support. The legal rules about using the trust are not changed and are controlled by Medicaid and SSI.
Keep in mind that if you want to create an SNT for your child’s future inheritance, this is a different trust and is not a pay back SNT.
Make sure your divorce attorney is aware that your child has special needs and will use or is using Medicaid and/or SSI. This will ensure that the child support is fully available for your child while preserving her eligibility for important public benefits.