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Special Needs Trusts
Are you on SSI and/or Medicaid and expecting:
Personal Injury Settlement?
Worker’s Compensation Settlement?
Stream of income payments?
There are planning techniques which will allow a person on SSI and/or Medicaid to keep his benefits even if he receives a large amount of assets or a stream of income.
For example, a person with disabilities under age 65, who receives a personal injury settlement can set up a Special Needs Trust to hold the settlement money and remain eligible for Medicaid benefits. The Special Needs Trust may pay for items which benefit the disabled person except for food, clothing or shelter. For example, the Trust could pay for car expenses, pet expenses, a computer, TV, iPod, cable TV, vacation, concert tickets, internet service, etc., things typically considered “extras” that make the life of the person with disabilities more enjoyable. His Medicaid will continue plus he’ll have the use of his settlement funds for “extras.”
Without utilizing special planning techniques, a person with disabilities will lose Medicaid and/or SSI benefits upon receipt of a large amount of assets such as a Personal Injury settlement or inheritance. The Department of Human Services and Social Security will require the person to “spend down” the funds to $2,000 in order to become re-eligible. The funds will be gone and will not benefit the person in the long run. With a Special Needs Trust, the funds are protected, they don’t have to be spent down to below $2,000 and eligibility for Medicaid and/or SSI is maintained.
Establishing a Special Needs Trust takes special legal knowledge and some time. The earlier you can consult with a Medicaid planning attorney, the better. If consulted early in a case, the Personal Injury, Worker’s Compensation, probate or Social Security attorney can coordinate with the Medicaid attorney to make sure that there is not a gap in benefits.
Do you have assets or income that prevent you from qualifying for SSI or Medicaid? There may be solutions to keep assets and/or income while receiving SSI and/or Medicaid. You should consult with a Medicaid attorney immediately.