Many individuals that receive a personal injury settlement require government assistance programs. When the money from a personal injury award is handled correctly, it can positively affect eligibility for these programs.
Putting the funds in a trust is important to preserve eligibility for income-based government programs. A Tulsa personal injury attorney can help you set up this arrangement.
Managing Your Settlement
A person who suffers a debilitating personal injury may rely on government assistance programs such as Medicaid or Supplemental Security Income (SSI). If handled properly, the money obtained from a personal injury lawsuit settlement, structured settlement, or jury award can jeopardize these programs’ eligibility.
A Settlement Protection Trust is a specialized type of special needs trust that segregates funds to not interfere with eligibility for means-tested government benefits. Depending on the situation, the trust can be revocable or irrevocable. It can also be either a grantor or a non-grantor.
A trustee, typically a family member or professional trustee, manages the fund on behalf of the disabled beneficiary. Distributions from the trust can be in the form of adjustable periodic payments, lump sum payments or a structured settlement annuity. The trustees can decide based on the beneficiary’s best interest but with limited discretion. They can choose from taxable or tax-free distribution modes and design payments to meet various objectives.
Investing
A personal injury trust is a legal way to protect your settlement. The faith can separate compensation money from other income, so you don’t need to lose means-tested state benefits. It can also help with day-to-day needs like medical equipment, transportation, housing modifications, carer assistance or other considerations.
Expert money management is often included in the services provided by a trusted personal injury trustee. Many injured parties need more expertise to handle large amounts of money. A Personal Injury Settlement Trust can ensure that the money is invested properly and lasts as long as possible.
Depending on the type of trust, there are various investment options available. Some of these include annuities and structured settlement annuities which offer superior economic returns and tax advantages.
Getting Additional Education
Suppose a person is disabled enough to receive their personal injury settlement, placing them above Medicaid or SSI’s resource limit. In that case, tools exist that can help keep the money they receive in an exempt asset category. One of those is a Special Needs Trust. There are a few different types, including an ABLE account and a Self-Settled Special Needs Trust. Our team can help you determine the type of trust that is best for you.
Another way that people use their personal injury settlement is to pursue further education. This can help them find a new career and increase their income in the long term.
Using Your Settlement
The last thing you want is to be unable to afford the medical treatments and other needs that arise due to your injury. You can avoid this by placing any funds you receive in a personal injury trust.
If you are a disabled person and are receiving means-tested government benefits such as SSI or Medicaid, the receipt of a large settlement may jeopardize your eligibility. A special needs trust, a self-settled special needs trust, allows you to deposit funds from your lawsuit in a separate account and still be eligible for government assistance.
The trustees of your personal injury trust are responsible for looking after your funds and will open a bank account in the name of your faith. This will ensure the funds are held separately from your accounts and protected against future creditor claims. This is the safest option if you don’t want to give away direct access or control of your award.
