Can an Unexpected Sum of Money Be a Bad Thing?

It can if you’re currently receiving public benefits.

Public benefits (such as Medicaid and SSI) can be difficult to obtain, but they are very easy to lose. Most needs-based public benefit programs (such as Medicaid that pays for long-term and other medical care needs) have strict financial eligibility requirements that must be maintained as long as you are receiving the benefit. With asset limits being so low (for example: the asset limit for an unmarried applicant is $2,000), even the slightest change in circumstance can turn you from eligible to financially ineligible almost instantly.

Which begs the question: what should you do if an unanticipated sum of money falls into your lap and changes your financial situation?

The first thing to do is: realize that this happens more often than you think. Lump sum gains come in various forms, including inheritance, legal settlements, money gifts, gambling winnings, and more. The unexpected, nonrecurring nature of these gains makes them nearly impossible to predict, and therefore difficult to plan for, but they are not without a solution.

Which is why the next and most important thing to do is: talk to our lawyers right away. Without careful and timely strategizing and planning, your needs-based benefits may lapse or terminate altogether, leaving you in a worse situation than if you never receiving the lump sum at all. Luckily, there are various ways for us to help you keep, invest and/or use the lump sum without letting it affect your public benefits. Just like we do when we first qualify you for benefits, we will evaluate your specific financial situation and devise a legal plan that will fit your needs and avoid interruption to your benefits.