Personal injury attorneys should work very closely and carefully with their clients who have a child or adult child with special needs to ensure a plan is put into place that benefits the person for the rest of their lives. Otherwise, the settlement from a personal injury lawsuit could unintentionally cause a person with special needs to lose valuable government benefits they are entitled to receive.
The ideal situation is for a personal injury attorney to collaborate with a special needs attorney to ensure that valuable benefits remain intact. A settlement from a personal injury or medical malpractice lawsuit needs to be handled carefully so that a child or adult with special needs, no matter his or her age, keeps much-needed Supplemental Security Income and Medicaid benefits intact.
If a self-settled trust is not in place and a child with special needs receives a personal injury or malpractice settlement, the extra money would increase his or her countable assets to more than $2,000, then public assistance will be reduced or eliminated altogether. A self-settled trust prevents that from happening.
Self-settled trusts are different from third-party trusts, which also protect public assistance. A self-settled trust must include a provision directing the trustee, if the trust contains any funds upon the death of the beneficiary, to pay back anything the state Medicaid program has paid for the beneficiary. Also, the rules governing permissible distributions for self-settled special needs trusts are generally more restrictive compared to third-party special needs trusts.
Once the self-settled special needs trust is formed, it can be funded with the settlement money received from the personal injury lawsuit. A self-settled trust can limit the kinds of payments its trustee can make for the child or adult with special needs, and often requires an annual accounting report to the Illinois Medicaid agency and sometimes to a court that may keep jurisdiction over a trust. Something to note: A self-settled special needs trust is not an option for adults with special needs who are over the age of 65.
Despite the limitations, setting up a self-settled special needs trust for your child or adult child with special needs is a great way to ensure he or she receives deserved compensation from a personal injury lawsuit. And, most importantly, it keeps public assistance like SSI and Medicaid in place. A personal injury lawyer and a special needs planning lawyer who team up are likely to best help their disabled clients get the compensation and government benefits they deserve for life.
Rubin Law is the only law firm in Illinois exclusively limited to providing compassionate special needs legal and future planning to guide our fellow Illinois families of children and adults with intellectual disabilities, developmental disabilities, or mental illness down the road to peace of mind. For more information, email us at firstname.lastname@example.org or call 866-To-Rubin.