When a child is the plaintiff if a personal injury settlement, a number of issues come up, especially if that child is disabled.
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Introduction
Ryan Henry was riding in the back of his mother’s car when it was hit by a commercial truck. The driver of the truck had fallen asleep at the wheel. Ryan’s mother was killed, and Ryan was severely injured, with brain trauma and kidney failure, which rendered Ryan permanently disabled, and with ongoing medical problems. Ryan was seven years old. Litigation resulted in a $1.6 million settlement for Ryan. Additionally, at seven years old, Ryan was the beneficiary of his mother’s estate of $500,000. Ryan’s impairments and health issues would most-likely last for his lifetime.
In a situation where there is a disabled child in personal injury litigation, issues very often present themselves which require the use of special needs trusts. In a non-disability case, a structured settlement may be sufficient, or, more often with minors, the establishment of a settlement trust under SPR 98.16W. But when there is a child who is disabled, either from the injury, or who was already disabled, i
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How Supplemental Security Income Works
Supplemental Security Income (SSI) is a “needs-based” program designed to assist disabled people with food and shelter costs. When someone qualifies for SSI, they also receive Medicaid benefits, which provide medical coverage. In order to qualify for SSI, a person must be disabled within the definition set out by the Social Security Administration, and his or her income and resources must be below certain minimal amounts. When a person receives a personal injury settlement or judgment, or when they receive an inheritance, if that amount puts them over (essentially) $2,000 in resources, then they are disqualified from receiving SSI benefits until their resources go below that amount.
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Who Can Establish the d4A Special Needs Trust
Under the statute, the parent(s), the grandparent(s), the disabled person’s guardian or the court may establish the d4A trust. In the context of litigation, very often the trust is established under SPR 98.16W as a qualified settlement trust and as a special needs trust. In this context, it is often the court that establishes the trust. Many judges prefer this method, as it allows court supervision of the trust in the same manner as a settlement trust, while at the same time preserving the beneficiary’s qualification for SSI. Within the inheritance context, very often the court prefers to have the parent or guardian establish the special needs trust, then orders the proceeds to be paid into the trust through probate
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Special Needs Trusts Often Make the Difference
Special needs trusts can often make the difference in provide for the beneficiary. In addition to the d4A trust, there are third party trusts which do no require payback to the state, and pooled trusts, which allow management of the assets in a pooled fashion for many beneficiaries. In both the litigation context and the inheritance context, special needs trusts are a critical component of a proper settlement plan.
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