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Special Needs Trusts And The Importance Of Their Use
Most personal injury attorneys will they you they are wholly unfamiliar with both the purpose and use of special needs trusts. Special needs trusts however, are perhaps the single most important vehicle for protecting your eligibility for government benefits in the event of a personal injury recovery. It is their very ignorance in this regard that has led to them being sued for malpractice when one of their clients for whom they obtained a favorable settlement suddenly loses their government benefits. It is absolutely critical for your personal injury attorney to understand when you as a personal injury claimant requires a special needs trust.
Federal and state laws allow the proceeds from an injury lawsuit to be placed into a specialized trust for the victim's benefit. This allows the injury victim to maintain eligibility for government benefits. Called a special needs trust, this fund pays for important medical and personal needs that are not usually funded by public programs. According to an article in USA Today, "A special needs trust . . . can improve a disabled adult's quality of life without endangering eligibility for government programs."
A special needs trust is often used when the injury settlement may not be sufficient to cover the victim's future care. Depending on state laws, it can also be used to pay for life-enhancing needs, such as specialized rehabilitation, additional attendant care, a wheelchair accessible vehicle, cultural events, a vacation or even a home. With as little as $2000 in certain assets, you can be disqualified from some governmental benefits, including MediCal and Supplemental Security Income. But federal law does not consider you to have "received" money if it's placed in an irrevocable special needs trust. Therefore, you can still receive your governmental benefits. The special needs trust also allows you to integrate your trust payments with your government benefits. By receiving maximum basic living healthcare benefits from public programs, you can then use special needs trust payments to further improve your quality of life.
Special needs trusts are most frequently established once the personal injury claim has settled but before the proceeds of settlement have been disbursed. Special needs trusts do not require significant time to prepare however, they are highly technical and require detailed knowledge of public benefits and tax law. If trust provisions do not follow both federal and state laws, the assets could still be included by officials considering your eligibility for government benefits. At the EISENBERG LAW FIRM, we refer our clients to highly qualified trust attorneys who specialize in the establishment of special needs trusts to insure their interests are best protected.
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