Getting Familiar With Special Needs Trusts

As an attorney, you specialize in winning personal injury cases on behalf of your clients. However, resolving their case doesn’t necessarily end with winning the award or settlement. Under federal and state law, you must ensure your client remains eligible for government benefits. This can be done through a special needs trust.

A special needs trust is a type of pooled trust designed to protect the assets of a disabled person while ensuring that they still qualify to receive government benefits such as Supplemental Security Income (SSI) and Medicaid. In essence, the trust provides for supplemental items that improve the beneficiary’s quality of life. In order to guide your client, you must understand the different types of special needs trusts available.

Third Party Special Needs Trust

A third party special needs trust is established and funded by someone other than the beneficiary (e.g., a parent or sibling). The beneficiary’s assets cannot be used to fund the trust and are not counted for Medicaid eligibility purposes, which allows the beneficiary to continue using their government benefits. The person that funds the trust must sign and transfer the assets to the trustee. As your client’s representative, you will write all the necessary documents and obtain a court order if necessary.

A Non-Pooled Special Needs Trust

A non-pooled special needs trust is established for one beneficiary and funded with their assets. Once signed by the beneficiary, the assets are transferred to a qualified trustee. If your client will utilize this type of trust, you will write all the necessary documents and obtain a court order if necessary.

A Pooled Special Needs Trust

A pooled special needs trust is also established and administered by a nonprofit association and is funded with the beneficiary’s assets. Once established, the trust document is signed by a relative or legal guardian, and the assets are then transferred to the trustee. The trust documents are provided by the trustee instead of an attorney.

Special needs trusts can dramatically improve the quality of life for your clients who are deemed Medicaid or SSI eligible. All of the aforementioned trusts maintain eligibility for asset-tested public benefit programs; however, differences are based on whose money funds the trust and what is required to establish the trust. Synergy Settlement Solutions can relieve you of the work it takes to set up a special needs trust and will ensure that your client’s government benefits are fully protected.

For more information about pooled trust for medicaid, or to schedule a consultation, please submit our contact request form.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.

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Panter, Panter & Sampedro

"I don't think I've directly said "thank you" for helping us with Bridgett’s case. We sent the reduced payment to Medicaid and called Bridgett's mom to tell her approximately how much money was going to be left for Bridgett and she broke down over the telephone. Given only $25k of insurance and a $850k medical bill from the hospital she didn't think Bridgett would ever see a penny."

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Jeffrey Meldon & Associates, P.A.

Understanding Structured Settlements and Medicare Set-AsidesThird Thursday Webinar Series

The parties agree that a Medicare Set-Aside is needed, now what? In this month's webinar, presented by Synergy CEO, Jason D. Lazarus, you will learn about the process basics for setting up a set aside including MSA allocations, funding mechanisms for set-asides, post-settlement administration as well as an overview of the process to make sure you close the case compliantly.

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