People with disabilities often rely on government benefit programs that are only available to people with a significant level of financial need. Medicaid provides health care insurance, and this is one of the benefits that people with special needs often rely upon. For income, many individuals with disabilities rely on Supplemental Security Income or SSI.
If you were to become disabled due to injuries sustained in an accident, you may be enrolled in these government benefit programs. However, what would happen if you were to receive a personal injury settlement? Once you received the settlement, your financial situation would change, and you could be deemed ineligible for these need-based government benefits.
Under these circumstances, you could protect your personal injury settlement through the creation of a special needs trust. After the trust is established, a trustee would handle the trust administration tasks. Since the funding for the trust is coming from assets that are the property of the beneficiary, it would be a first party or self-settled special needs trust.
The government benefit programs provide the basics, but there can still be unmet needs. Under program rules, the trustee could use assets in the first party special needs trust to satisfy the supplemental needs of the beneficiary. The program regulations are complicated, but if the trustee acts within the guidelines, ongoing eligibility for Medicaid and Supplemental Security Income would not be jeopardized.
A first party special needs trust could potentially preserve your personal injury settlement while you are living without impacting government benefit eligibility. However, there is a drawback that enters the picture when you create a self-settled special needs trust. After your passing, the Medicaid program would seek reimbursement from your estate.
There is another type of special needs trust called a third party special needs trust. With this type of trust, the source of the funding is someone other than the beneficiary. When this type of trust has been established, Medicaid would not seek reimbursement from the estate of the beneficiary after his or her death.
Free Special Needs Planning Report
You should certainly have a thorough understanding of government benefit program rules and regulations if you are interested in creating a special needs trust. Our firm has prepared a comprehensive, in-depth report on the subject, and we are offering this report to our readers free of charge at the present time.
This report will provide you with a solid foundation of information to work with going forward. Since it is free, there are no risks involved, so you can get your copy without entering any payment information.
To access your copy of the special report, visit this page and follow the simple instructions: Dallas TX Special Needs Planning.