| When do I need a Special Needs Trust? If you are about to receive money from a personal injury settlement and you call into on of the following categories, you can benefit from a Special Needs Trust:
- When at the time of your settlement, you are receiving Supplemental Security Income (SSI) and/or Medicaid benefits and you want to continue receiving these benefits.
- When at the time of your settlement, you are not receiving SSI and/or Medicaid benefits but you want to preserve your eligibility to receive these benefits in the future.
Does this mean that the proceeds from my personal injury settlement can cause me to lose my SSI and Medicaid benefits?
Yes. Depending upon the amount you receive from your settlement and how that amount is paid, you can lose these benefits.
When can my personal injury settlement affect my SSI and/or Medicaid eligibility?
The money you receive from your personal injury settlement can cause you to lose your SSI and/or Medicaid benefits when:*
A lump sum cash settlement exceeds $2,000.00.
A structured settlement monthly payment exceeds $637.00 per month.
A joint spousal structured settlement monthly payment exceeds $956 per month.
A lump sum cash settlement to a minor's parent exceeds $2,000.00.
A structured settlement payment to a minor's parent exceeds $637.00 per month.
A future distribution made by a bank or personal trustee is non-compliant under 42 U.S.C. 1396p(d)(4)(A).
Monies paid directly to you, or paid on your behalf, and they are non-compliant under 42 U.S.C 1396p(d)(4)(A).
*Amounts may vary depending on individual circumstances.
If I am not receiving SSI and/or Medicaid benefits at the time of my settlement, can the settlement terminate my right to later apply and receive these benefits in the future?
Yes. Should your settlement include an annuity funded schedule of periodic payments, the annuity payments, depending upon their amounts and duration, can permanently terminate your right to later apply and receive SSI and/or Medicaid benefits.
How can I prevent my personal injury settlement from terminating my current eligibility and my future eligibility to receive SSI and/or Medicaid?
Generally, the best way to prevent the loss of SSI and/or Medicaid benefits is to place the settlement proceeds into a Special Needs Trust.
What is a Special Needs Trust?
A Special Needs Trust is an irrevocable grantor trust that exists primarily to preserve and protect your eligibility to receive SSI and/or Medicaid benefits both now and in the future.
How does the Special Needs Trust protect my eligibility to receive SSI and/or Medicaid?
When in compliance with federal regulations, you place your settlement proceeds into a Special Needs Trust, this money will not be counted by the Social Security Administration when determining your eligibility to receive SSI and/or Medicaid benefits.
When should I establish a Special Needs Trust?*
When the present value of your future medical needs substantially exceed the proceeds from your settlement, you will likely benefit from a Special Needs Trust. On the other hand, when the proceeds from your settlement substantially exceed the present value of your future medical needs, this trust may not be the best place to put your money.
What if I am not sure what my future needs will be?*
When the present value of your future medical needs and your settlement proceeds are not substantially different or when your future medical needs my be unclear, in these cases a "support" Special Needs Trust may be best for you. The "support feature" provides that when you are not receiving SSI and/or Medicaid benefits, the trust can also serve you as a support trust. Later, when you need SSI and/or Medicaid benefits, the trust will end the support program and will begin to make only those payments permitted from the Special Needs Trusts.
*These are general guidelines. Individual circumstances differ in every case and the advise of an experienced professional must be sought before any decision is made with regard to the Special Needs Trust.
How do I set up a Special Needs Trust?
First, it must be determined if your personal injury settlement will terminate your SSI and/or Medicaid eligibility.
Following this decision, it must be decided whether or not preserving your SSI and/or Medicaid benefits is necessary.
To assist you in making these important decisions, the personal injury attorney typically retains an attorney who specializes in these matters. The retained attorney will assess your situation and then advise you as to the best course of action for you to take.
Once it is decided that creating a Special Needs Trust is in your best interest, you select who you want to be the trustee of your Special Needs Trust.
Having decided the trustee of choice you will then need a special needs trust document. The retained attorney will also prepare your trust document and will do what is necessary in order to create your Special Needs Trust
Once my Special Needs Trust has been installed, who do I contact for information and service?
You may contact either your First Capital trust officer or the third party administrator (TPA) assigned to your trust.
You may begin by contacting your TPA when one is assigned. However, a TPA is not necessarily assigned in all trusts.
In any case, you may contact your First Capital trust officer directly.
Choosing the right trustee
Choosing the right trustee is a critical decision; an unskilled trustee or trust administrator can inadvertently cause the loss of your SSI and/or Medicaid benefits.
Choose First Capital
First Capital Surety & Trust Company was created specifically to serve injury victims and their families. We distinguish ourselves from other fiduciaries due to our special expertise, experience and competencies with regard to trusts, SSI, Medicaid and the regulations governing these complex and special areas.
Unlike wealth building trusts generally managed by banks, Special Needs Trusts are different and must be administered differently. First Capital stands apart from many of its competitors because it has the systems, procedures and the necessary experience to efficiently administer Special Needs Trusts.
These same efficiencies also allow First Capital to charge lower trust fees compared to the trust fees charged by many other trust companies.
First Capital as Trustee
When you choose First Capital as trustee, you also have access to live, on-line video teleconferencing with a trust officer.
This free service is called TRUSTLINKTM. It allows you to see and talk to your trust officer without having to leave your home or care facility.
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