Structured Settlements & Special Needs Trusts after a Personal Injury Award

After a Personal Injury Settlement or Award

People suffering from debilitating brain, spinal cord or burn injuries often require ongoing medical treatment and a lifetime of care. If the person injured is a young child, he or she will need a means of support after both parents have passed on or are no longer able to work. Alternatively, if one spouse is disabled due to a serious accident, he or she will also need caring for after the healthy spouse is no longer able to work or has passed on. In both cases, a structured settlement or special needs trust (sometimes referred to as a supplemental needs trust) can provide a steady flow of income from a personal injury award or settlement for the upkeep and care of a seriously injured person.

Regardless of whether you choose a structured settlement or decide to create a special needs trust, there are tax advantages and Medicaid eligibility issues that should be considered.

Creating a Special Needs Trust with a Personal Injury Award or Settlement

Creating a special needs trust allows you to set aside money from a personal injury award or settlement for the care and upkeep of someone suffering from a serious, debilitating injury. Special needs trusts are exempt from federal income tax and are not considered in Medicaid eligibility calculations. This is especially important since, in order to qualify for Medicaid, a person must be impoverished.

As a result, people who need long-term, in-home or institutional care often have to spend down their assets before they can qualify for Medicaid. However, money from a special needs trust is exempt from such a requirement. Practically speaking, this means your disabled child or spouse may be able to qualify for Medicaid while using money from his or her special needs trust to pay for other needs.

Special needs trusts are especially useful for injured adults who are no longer able to care for themselves, and for children suffering from Erb’s palsy or cerebral palsy.

Structured Settlements and Personal Injury Awards and Settlements

In personal injury cases involving catastrophic injuries and large sums of money, the payment of the settlement or award can be made in installments over a set period of time according to a customized payment schedule. A structured settlement may involve monthly, quarterly or semi-annual payments; alternatively, a structured settlement can establish a date after which payments will increase to meet the growing needs of a maturing person. While structured settlements may be intended to last the lifetime of the recipient, a beneficiary can be named to receive any remaining amount should the original beneficiary die before all funds are disbursed. As in the case of special needs trusts, structured settlements are not taxable.

Contact Long Island Personal Injury Attorneys Rosenberg & Gluck

At the Holtsville, New York, personal injury law office of Rosenberg & Gluck, we help clients sort through some of the financial considerations facing them after a serious injury. Our attorneys can discuss and explain the options available to you involving either structured settlements or special needs trusts, and help you make the decision that makes the most sense for you and your family.

To schedule a free consultation today to learn more about our practice and how we can help you, contact Long Island personal injury lawyers or call 631-451-7900 today.