A special needs trust is designed for beneficiaries who are disabled, either physically or mentally. It’s a trust set up for the person with special needs to supplement any benefits the person with special needs is currently, or may receive in the future, from government programs. A properly drafted trust of this type will allow the beneficiary (injured person) to remain eligible for, and receive, government benefits while still receiving funds from the trust. In the case of a special needs trust, the property (settlement proceeds) are held and managed for the benefit of the disabled loved one by a trustee, usually a family member, friend, or private professional Trustee (bank). Put simply, by establishing this type of trust your injured loved one will not actually “own” the settlement proceeds in the trust so as not to disqualify him or her from public benefits.
There are numerous federal and state programs a disabled person may qualify for that could be placed in jeopardy with an injury settlement. Supplemental Security Income (SSI), Social Security Disability Insurance (SSD), Medicare and Medicaid are government programs that offer support to disabled individuals. SSI is a “needs-based” program that is only available to people who meet certain income and resource limitations. In most states, including Texas, people receiving SSI benefits are automatically entitled to Medicaid.
The time to establish a special needs trust is after case resolution, but before settlement proceeds are technically “received.” Otherwise, if funds are first received by the injured person, or received by that person’s lawyer, and thereafter funneled to the trust, the protective benefits of establishing the trust are lost. The settlement money must be sent directly to the trust for it to have the intended effect. An experienced brain injury lawyer is familiar with this area of law and knows how to navigate special needs trusts which can complicated.
