When an individual is injured in a personal injury accident due to the negligence of another party, that person frequently will file a legal action and may receive a settlement or a verdict from the bad actors. In most cases, that settlement is a huge benefit to the victim. The victim may have a number of medical expenses, and could be unable to work. The settlement can help the victim pay his or her outstanding bills, as well as allow the victim to take some time off work to heal from his or her injuries.
However, for some people, a personal injury settlement could potentially do more harm than good, if not structured correctly. Many individuals with special needs or who are legally disabled receive money and benefits from the state or federal government to help them with their special needs. Some of those benefits include Social Security Disability Income (SSDI) and Medicaid (or Medical here in California). SSDI provides a monthly payment to low-income people who are disabled. Medicaid is a program that pays for health care for certain segments of the population, including individuals with special needs. Both SSDI and Medicaid are means-tested, meaning that in order to receive them, individuals must meet certain asset and income requirements.
If a special needs individual is involved in an accident, and becomes eligible for a settlement, it’s critical that advocates for that individual stop to consider how receiving that money could affect any benefits to which the individual is entitled. It’s not uncommon for a special needs individual to receive a settlement which then disqualifies him or her from receiving SSDI and Medicaid. Although the individual then has the money from the settlement available to pay for necessary medical treatment and associated lost wages,, it in effect means that the settlement would cut off necessary benefits covered under those federal and state programs.
Instead of a special needs person receiving the money directly from the settlement, there are a number of other ways to structure the funds which would allow the individual to continue receiving the benefits of those programs, while being able to obtain necessary medical treatment, as well. One of the biggest tools in that area is a special needs trust. A special needs trust helps a special needs person have access assets which can be used for their benefit (i.e., the settlement proceeds), while still being allowed to qualify for certain programs (SSI and Medicaid).
In some cases, an annuity can also be beneficial in this situation. Annuities can help a great deal for married beneficiaries and may allow the individual to continue receiving benefits from a public program in order to pay for necessary living expenses
It’s critical that a person with special needs work with an attorney who is aware of the potential pitfalls involved in settlements and government benefits programs. Most attorneys who work with personal injury cases are not also specialists in special needs trust and are unfamiliar with the intricacies involved, thus it is important to work with a lawyer who is aware of the challanges and coordinate the case with an understanding of how special needs trusts actually work.
If you have been involved in an accident in the Oakland-San Francisco Bay area and you are concerned about how any potential settlement could affect your eligibility for certain government programs, call Micha Star Liberty, San Francisco personal injury attorney, at 510-645-1000. She can help. Call today to learn more or to schedule a free consultation on your case.