Personal injury attorneys very often represent clients who have become permanently disabled due to their injuries, and as a result are now eligible for SSI, Medicaid and other public benefits. The receipt of these personal injury proceeds, whether by settlement or suit, endanger the continued availability and receipt of these benefits. The establishment of a court-order Special Needs Trust can effectively preserve the public benefits without forcing the disabled person to spend down these proceeds and become impoverished. With already high and rising medical costs, this is an all important tool.

A Special Needs Trust:

  • Must be established by a parent, grandparent, legal guardian or court.
  • Will receive all personal injury proceeds.
  • Will not be considered a resource for purposes of public benefits.
  • Will preserve the individual's Medicaid and other public benefits.
  • Must follow specific guidelines set by Federal and State law in its establishment and maintenance.

The PI Attorney must not only be aware of the availability a Special Needs Trust in order to preserve such public benefits but have a sense of the timing of such trusts. All too often, an elder law attorney is contacted by a PI Attorney at the eleventh hour and asked to establish such a trust. Court-approval is a must for these types of trusts in order to provide notice of this trust to the Department of Children and Families and the satisfaction of other procedural requirements. Therefore, it is crucial that planning for such a trust begin early in the personal injury litigation.

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