Nationwide Settlement Planning Professionals

After considering any potentially available government benefits, choosing the proper trust instrument can often be the next step toward helping our clients. There are many types of trusts, each meeting a variety of specific needs, including Special Needs Trusts, Minor’s Trusts, and Settlement Protection Trusts. We offer access to a national network of elder law attorneys to assist with drafting trust documents, as well as the most reputable nationally chartered corporate trustees.

Special Needs Trusts

A Special Needs Trust (SNT) can prevent the interruption of extremely important government benefits such as Supplemental Security Income (SSI) and Medicaid when someone obtains a financial settlement as part of a case resolution. When the settlement proceeds are deposited into a SNT, the funds can be used to purchase approved goods and services for the beneficiary without disrupting these valuable benefits. The Special Needs Trust beneficiary will still receive the full settlement amount without sacrificing his or her eligibility for Supplemental Security Income (SSI), Medicaid, or any other government benefits if set up and managed in accordance with Medicaid laws in their resident state.

Who Can Benefit from a Special Needs Trust?

For many clients, the only way to protect government benefits such as Supplemental Security Income (SSI) or Medicaid is to place the funds from a lawsuit recovery in a qualified Special Needs Trust. While “spending down” smaller settlements might be encouraged to avoid setting up a Special Needs Trust, most clients receiving a personal injury settlement cannot afford to lose access to trust assets to take care of future medical and support needs.

A Special Needs Trust beneficiary can continue to qualify for government benefits if the trust is properly drafted to comply with the following requirements:

  1. The government is repaid at the trust termination (normally the beneficiary’s death) the amount that Medicaid spent on the beneficiary;
  2. The trust money can only be spent for the sole benefit of the trust beneficiary; and
  3. The goods or items purchased are reasonably related to the disability of the trust beneficiary.

In addition to these basic rules, each state may have additional requirements.

The trustee of a Special Needs Trust may be a family member, attorney or a corporate trustee. However, it is very important that the trustee selected possesses the knowledge and experience to comply with the rules and requirements of a Special Needs Trust, or else benefits could be accidentally jeopardized.

Trusts for Minors

In almost all cases involving lawsuit recoveries for minor children, settlement funds are placed into a restricted account or deferred annuity on behalf of the minor. Depending on the jurisdiction and discretion of the judge, most courts choose to utilize a trust account, structured settlement annuity, guardianship account, or the registry of the court to handle settlement proceeds for minors. A Minor’s Trust is created to manage and protect the settlement proceeds and assets of a child until they reach a specified age in the future.

State statutes vary concerning the maximum age at which the trust remains open until final distribution, but age 25 is a common age for the termination of a Minor’s Trust. Establishing a Minor’s Trust ensures that the settlement funds will be available in the future to pay for legitimate expenses such as medical bills, college tuition, living expenses, and a down payment on a house. A trust is a valuable protection tool to prevent a child from needlessly squandering their settlement shortly after reaching the age of 18, or whichever age children are deemed to be adults and no longer considered minors in their state.

Settlement Preservation Trusts

These binding trusts protect the plaintiff’s settlement amount from irresponsible spending, while still providing enough funds for basic life necessities. Settlement Protection Trusts typically include a termination date at a specified date in the future, such as age 25, at which time the funds can become readily available to the beneficiary. They can be managed by an individual trustee or a corporate trustee.

Reversionary Trusts

With this provisional trust, the plaintiff draws the funds necessary to cover lifetime medical expenses. When the plaintiff dies, the remaining funds revert back to the defendant.

Medical Custodial Accounts

If a client is in need of medical services not covered by insurance or Medicare, a Medical Custodial Account can be used to collect and dispense settlement funds for these medical expenses. Many Medicare Set-Asides utilize this type of professionally administered trust account.

Qualified Settlement Trusts (468B) for Multi-Claimant Settlements

The period of time between a verdict or settlement and the final distribution of funds involves a lot of burdensome work for attorneys on both sides of a case. Liens and government regulations have created an intricate maze that even the sharpest law firms do not enjoy navigating. Our team of Qualified Settlement Fund experts can help law firms create a recovery management plan for claimants that enables the case to be funded into the Qualified Settlement Trust while awaiting final resolution of liens and other requirements. The Qualified Settlement Trust also preserves all of the injured claimants available settlement investment options until a final decisions are made.

To learn more about our Qualified Settlement Fund (QSF) Administration services, contact us for a free consultation.