When SSDI and Estate Planning Intersect

If you are like many of your Cookeville neighbors, you may think estate planning is only important for wealthy Tennesseans. After all, you may not think you have many assets to leave to your spouse, children or other heirs. If you or someone in your family receives Social Security Disability Insurance payments, though, estate planning may be extremely important.

According to a recent study, roughly 6.7% of Tennessee residents receive disability benefits. That puts the Volunteer State in the top 10 of states for the number of citizens who rely on disability payments. If you use your disability benefits to help support family members, you must understand what happens when SSDI and estate planning intersect.

You have minor children

Providing for your family is important to you. If you receive SSDI benefits and use them to take care of minor children, you may worry about what happens to your kids if you die. Fortunately, your minor children may be able to receive up to 75% of your benefits until they turn 18. Natural children, adopted children and stepchildren usually qualify for survivor benefits. Some adult children and even certain grandchildren may also receive survivor benefits in specific situations.

You have a spouse

If either you or your spouse receives SSDI benefits, you should know what happens to them after one of you passes away. The benefits a surviving spouse receives depend on a few factors. Generally, though, if you have a child under the age of 16, the surviving spouse receives up to 75% of the SSDI beneficiary's payments. On the other hand, if you have retired, you may be able to receive all of your deceased spouse's benefits.

As you can see, thinking about SSDI payments is an important part of estate planning. Because deciding survivor eligibility requires a careful analysis of law and facts, you must not assume your spouse, children or other dependents are ineligible for SSDI payments after your death.