After suffering a debilitating personal injury in an accident, a disabled individual may rely on government assistance programs like Medicaid or Supplemental Security Income (SSI). The money from a personal injury lawsuit settlement or a jury award could adversely affect the eligibility for such government assistance programs if the money is not handled correctly.
You may need to establish a special needs trust to preserve your Medicaid or Social Security disability benefits. Establishing a special needs trust allows you to segregate money recovered in a personal injury settlement so that it does not interfere with eligibility for other assistance. Because your settlement was placed in a trust, the disabled individual continues to qualify for government assistance. You would be assigned a trustee who could advise you on how to spend the money in the trust without jeopardizing your Medicaid benefit or Social Security benefit.
As part of our services, Craig, Kelley & Faultless LLC will counsel you about structuring the payment of any personal injury settlement or jury award so that you get the most out of it. In some situations, we recommend the establishment of trusts, such as a special needs trust.
How Does a Special Needs Trust Work?
A trust is a legal instrument through which an individual can transfer assets out of their name and into the ownership of the trust. The trust is managed on behalf of those who are designated as beneficiaries.
There are multiple types of trusts. For example, to properly allocate a personal injury settlement for a disabled client under age 65, we would ask the court to establish a special needs trust. This is a specialized kind of special needs trust or “payback trust” established when a Medicaid/SSI recipient receives a lawsuit settlement or an inheritance or otherwise has funds that would make them ineligible to retain income-based government benefits.
A trusted person or professional trustee would be appointed to manage the trust on behalf of the disabled beneficiary if the beneficiary was incapable of doing so.
Upon the beneficiary’s death, any funds left in the trust would be used to repay any state that paid for medical assistance through a state Medicaid plan.
How Can I Use a Special Needs Trust For a Personal Injury Settlement?
As we worked with insurers to structure the payment of a personal injury settlement, we would ask the court to establish a (D)(4)(a) special needs trust with you as its beneficiary and instruct the insurer to pay the settlement to the trust.
The funds in special needs trusts cannot be spent to replace government benefits. The trustee would distribute money to pay for expenses not covered by Medicaid, SSI, or other government programs that would improve the beneficiary’s quality of life, such as:
- Medical and dental expenses not covered by other benefits (hearing aids)
- Special equipment (powered wheelchairs, hospital bed)
- Home appliances and electronic equipment, including TVs, cell phones, and personal computers
- Therapy or rehabilitation services
- Training and education
- Travel (including expenses for a companion)
- Legal expenses
- Insurance premiums
- Burial expenses
Funds from the trust could not be used for countable resources, such as stocks, bonds, or real estate other than your home or retirement accounts.
Schedule A Free Case Review With Our Experienced Indianapolis Personal Injury Attorneys
If you have sustained serious injuries in an accident, you need an experienced law firm that can provide trusted guidance and understanding of the specific challenges you face. You need a reputable law firm with the resources to devote to your case and a record of favorable results.
Craig, Kelley & Faultless, LLC has the detailed knowledge of personal injury law, litigation experience, financial resources to develop cases, and commitment to providing the personalized client service that you need. If you or a loved one has sustained a serious injury in Indiana, Missouri, Ohio, Illinois, or Kentucky, call us at (800) 746-0226 or contact us online for a free case review.
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