My mother has put me as her beneficiary for her Teacher's Retirement pension. Upon her death I would receive half of her monthly pension for the rest of my life. I currently receive SSI and would like to set up a Special Needs Trust. Would this income I'm receiving as a beneficiary from her pension that would go into the SNT make it a First Party SNT or a Third Party SNT?
The trust can be named as the beneficiary.
Estate Planning Attorney
Ideally, you should have your mother create a third party special needs trust for you and then change the beneficiary designation to the trust.
If she does not do this, then there are a few different scenarios. First, the amount of the monthly benefit you receive may not completely eliminate your eligibility for SSI. Your SSI cash benefit would be reduced, but if you remain eligible, even if you only receive a small SSI payment, then you would continue to receive medicaid. So your actual financial situation may stay essentially the same.
Second, you may be able to create a first party trust and put the money in it, which would preserve your SSI eligibility. You may have the choice of receiving a lump sum instead of the monthly pension payment, which would make creation of the trust easier and more likely.
And third is a more complicated scenario that involves choosing between SSI benefits and the benefits left you by your mother.
Start by talking to your mother about changing the beneficiary.
Elder Law Attorney
If you set it up it will be a first party trust. If yourmother sets up a trust for you and names the trust the beneficiary of her pension (if she can which is doubtful) it would be a third party trust. This is a complicated area of law. Discuss this with am attorney that specializes in SNT.