The primary purpose of creating a Special Needs
Trust is to maintain the eligibility of the injured
party to receive government benefits, specifically
Medicaid. Establishing a Special Needs Trust (SNT)
allows an injured party to receive a settlement
without being disqualified from SSI or Medicaid.
Federal and state laws allow proceeds from an injury
lawsuit to be placed into an SNT without those proceeds
being considered assets or countable resources for
the purpose of qualifying for government benefits.
There are several different types of Special Need
Trusts:
-
For injured parties under the
age of 65 (42 U.S.C. 1396p(d)(4)(A))
-
For injured parties over the age
of 65 (42 U.S.C. 1396p(d)(4)(C))
-
A third party Special Needs Trust
-
For injured parties that do not
qualify for Medicaid (42 U.S.C. 1396(d)(4)(B)
(also known as a Miller Trust)
Any of the above SNT's can be funded
with a structured settlement which provides the injured
party with excellent security, while also helping
to increase the value of the overall settlement. If
an injured party has a SNT funded with lifetime benefits
from a structured settlement annuity, then the injured
party will not outlive the trust benefits. In addition,
the interest earned in the structured settlement annuity
is tax free. However, the interest earned after the
funds are paid to the SNT and invested by the trust
will be taxable.
Advantages of a Special Needs Trust:
-
The injured party remains eligible
for Medicaid, State Medicaid Waiver Program and
Supplemental Security Income (SSI).
-
With as little as $2,000 in
certain assets, an injured party can be disqualified
from some government benefits, including Medicaid
and SSI. Federal law does not consider the
injured party to have "received" the money
if it is placed in a SNT.
-
The injured party remains eligible
for private care programs based on Medicaid eligibility.
-
The injured party can still purchase
medical services and equipment at regular rates,
whenever necessary.
- As seen below, these services and many
other are available to the injured party who
uses a SNT.
The following is a list of the types
of items and services that a SNT can pay for:
-
Out of pocket medical and dental
expenses
-
Essential dietary needs
-
Personal care attendant
-
Transportation, maintenance and
insurance for vehicles
-
Rehabilitation and gym memberships
-
Computers
-
Special education
-
Non-medical goods and services
that add pleasure and quality to life (not "food
and shelter" items), such as:
-
Televisions
-
Radios/CD players
-
DVD players
-
Movies o Travel
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