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July 18, 2012
Protecting Your Child: Special Needs Trust in Personal Injury Settlements
Disabled children suffering injuries in car accidents can experience complications of existing conditions that can make on-going care more challenging for both the children and healthcare providers. When pursuing those at fault for these injuries, car accident lawyers in Gloucester County and other parts of New Jersey look to create special needs trusts to manage resulting settlement awards. Trusts for disabled beneficiaries prevent others from accessing the funds thereby preserving the cash for continuing medical needs and living expenses.
Setting up a Personal Needs Trust
When two sides reach an agreement on a personal injury settlement for a special needs child, the attorney for that child, working with the court, should set up a personal needs trust. It’s not appropriate to set the trust up without a guaranteed award, because of the setup fees and filing costs involved with the trust creation. The last thing an attorney wants is to raise costs for a client unnecessarily. The attorney representing the child can also help appoint a trustee to manage the trust account funds. The trustee is the person who actually cuts the checks to pay for the child’s resulting medical bills and living expenses from the car accident.
Settlements and Social Security Disability
A special needs child may be receiving Social Security Disability income (SSDI) as a form of governmental assistance to help meet the costs of care. The Social Security Administration can lower benefits, if the child grows up and is able to earn an income from working. If the child is able to become a functional adult, these benefits may disappear entirely. Fortunately, a lawsuit settlement from a personal injury claim doesn’t count as earned income for the purpose of determining Social Security eligibility. A trust account also has no effect on this eligibility. This means a special needs child who’s injured in an auto accident may continue to receive disability payments and other forms of government assistance, including Medicaid, while still drawing money from a special needs trust.
Importance of Special Needs Trust
Establishing a trust account for a special needs child is imperative to ensure the settlement awarded based on the child’s injuries actually goes to helping the child live as normal a life as possible. Without the trust to protect the money and trustee to manage the account, others might give in to the temptation to spend the money on other things. This decision can leave a child without the cash necessary to pay for medical costs, including continuing physical therapy or subsequent surgeries. A special needs trust is especially important for a child who lacks the cognitive ability to make decisions. Without the trust, a child with diminished mental capacity may become a burden on the system, dependent on taxpayer dollars for care.
Regardless of who’s managing funds, the main concern when accidents injure children is making sure these kids receive the best care possible. When dealing with disabilities and special needs trusts, New Jersey car accident attorneys know how important is to protect settlement amounts to ensure children have access to money needed to pay their medical bills and maintain their quality of life.
The views, opinions and positions expressed within this guest post are those of the author alone and do not represent those of Davis Levin. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations.
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