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Special Needs Trusts

Preserving Eligibility for Needs- Based Government Benefits

In certain cases, settling parties may be receiving or be eligible to receive certain needs-based government benefits, such as Supplemental Security Income (SSI) or Medicaid. In these instances, a special needs trust (SNT) may be used to protect both the settlement proceeds and the claimant’s benefits eligibility.

Benefits of a Special Needs Trust

Individuals who qualify for needs-based government benefits must meet certain income requirements. In the absence of careful planning, a structured settlement annuity may render such individuals ineligible for crucial benefits by increasing their monthly incomes. A special needs trust can counteract this and help ensure that people who are unable to work due to disability or other qualifying factors maintain their ability to receive governmental benefits.

Advantages of SNTs include:

  • Can allow government benefits to continue to the payee
  • Funds may be used for eligible expenses not covered by government programs
  • In appropriate cases, can allow settlement proceeds in combination with government benefits to provide overall greater benefits to the payee

Both the Omnibus Budget Reconciliation Act of 1993 (OBRA 93) and The Foster Care Independence Act of 1999 allow many qualifying settlement recipients to take advantage of an SNT. Structures team of specialists can assist in determining whether an SNT is a good fit, and our access to reputable trust companies, life care specialists, and portfolio investment officers can’t be beat.

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