Why should a personal injury victim think about a special needs trust?
Special needs trusts are tools to help injury victims preserve certain government benefits, like Medicaid and Supplemental Security Income (SSI). Programs like these have caps on the amount of income and assets a person can have before losing eligibility.
For someone to qualify for SSI, that person cannot take in more than $735 per month, or that person loses benefits (this number changes every year). So, if a person on SSI receives significant assets through a personal injury settlement, that person risks losing access to those essential SSI benefits because the settlement exceeds the $735 cap.
That’s where the special needs trust comes in. If a special needs trust is properly structured, the assets held within that trust are not counted toward the caps that would ruin a person’s eligibility for benefits.
The funds inside a special needs trust can then be used to pay for necessities, such as:
- A home
- Health and dental treatment otherwise unavailable to the person
- Rehabilitative or therapeutic expenses
- Medical and diagnostic treatment beyond Medicaid
- Supplemental nursing care
- Supplemental dietary care
- Training and education
- Household bills
Why Would Someone Need Disability Benefits If They Have a Special Needs Trust?
Tragically, many individuals who rely on disability benefits and medical assistance for survival are disabled to the point where no private health insurer will cover them. Many of them also are unable to work, so they cannot get insurance through an employer. Additionally, the costs of private care tend to be very expensive, so it is unrealistic to expect that person to be able to indefinitely cover their care costs, even with a special needs trust. Thus, those disability benefits and medical assistance still provide valuable help for those who need it.