Excerpt from: Lawyers with Purpose (click for full article)
Many divorce attorneys are clueless about the impact on a client’s SSI and Medicaid eligibility of a marital property settlement, spousal support payments or child support payments. The incidence of divorce in families where a spouse or child has a disabling condition is almost twice that of families without such disabilities. Thus, it is imperative that we reach out to our Family Law brethren to advise them of Special Needs Trust planning in the context of divorce – well in advance of the negotiations that will yield the divorce settlement.
For purposes of SSI and Medicaid eligibility, direct receipt by the person with a disability of the following items constitutes “unearned income” which will reduce his SSI payment:
(i) non-exempt marital assets set aside as part of a property division;
(ii) spousal alimony or support payment in cash;
(iii) child support payments in cash.