The One Dollar Rule

Leaving even a small direct inheritance to a special needs child can be a catastrophic mistake for their Medicaid/SSI.

When it comes to Special Needs Planning (SNP), even a small financial oversight can have significant consequences. We like to refer to this as the “one dollar rule.”

The “one dollar rule” highlights a strict reality: for individuals receiving means-tested benefits like Medicaid or Supplemental Security Income (SSI), even one dollar over the allowable asset limit can result in a loss of eligibility.

Programs like SSI typically limit an individual’s countable resources to $2,000. If a well-meaning family member leaves a small inheritance, adds their loved one to a bank account, or gives a direct monetary gift that pushes assets to $2,001—even briefly—it can trigger a suspension or termination of benefits.

Why does this matter so much? Because these benefits are often essential. Medicaid may cover critical healthcare and long-term services, while SSI provides a baseline of financial support. Losing access—even temporarily—can create stress, administrative hurdles, and potential gaps in care.

This is where proper planning becomes essential. Instead of leaving assets directly to an individual with special needs, funds should be directed into a properly structured Special Needs Trust. Assets held in the trust are not counted toward eligibility limits, allowing your loved one to maintain benefits while still receiving additional financial support.

The “one dollar rule” serves as a powerful reminder: in special needs planning, details matter. Small oversights can have big consequences—but with the right structure in place, they are entirely avoidable.

Taking the time to plan correctly ensures that your loved one remains protected, supported, and secure—without risking the benefits they rely on every day.

Reach out to us at the Moskowitz Legal Group to do proper planning for your loved one.