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Special
Needs Trust
Of
the many obstacles which may hinder the settlement of a personal
injury suit, perhaps the most frustrating is the discontinuance of
public welfare benefits following an award or settlement.
Welfare benefit termination normally will occur if the recipient
obtains assets and/or income which exceed the modest qualification
thresholds set forth in the appropriate statutes. In cases
where the award is significantly greater than the value of the
welfare benefits, the loss of those benefits may not be of any
consequence. However in many potential settlements the
termination of entitlement benefits may place the injured party in
a financial position no better than the one he or she experienced
prior to the award. In fact, the injured party may be in a
far worse financial position once the benefits are withdrawn if
they exceed the value of the resources obtained via an award or
settlement. Under this scenario the injured party must first
exhaust the award before reapplying for the appropriate welfare
programs. Until the inured party is able to reapply for the
benefits, he or she may actually sustain a reduced level of care
or maintenance.
Where
the potential award is inadequate by itself to replace the
terminated welfare benefit, the ideal solution would allow:
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The
injured party to enjoy an improved quality of life through the
receipt of the settlement funds and the retention of the
benefits;
-
The
defendant to terminate any future exposure following the
settlement; and
-
The
public welfare agencies to resolve past liens and to retain
their applicable lien rights for benefits paid in the future.
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