Using a special needs trust for the disabled for car accident settlement proceeds.
Robert: This week Tom I was working on a special needs trust for the disabled, which is usually a little different from what I normally do. Usually, it's assets protection for somebody that's going on Medicaid. However, this is somebody that is already on disability, and they're already receiving Medicaid. They're under 65 and they have a windfall if you will either they inherit money. In this particular instance, it was recovery from a personal injury lawsuit if they've owned an excess of well over $300,000. If they were to receive that money, they would lose all the benefits.
We created a special needs trust for the disabled under 65 where it does not go into our client's social security number. We get an EIN. It's an irrevocable trust that money goes there. The trustee, who happens to be her son, can then spend all of that money on her. He just can't give her the cash. She's allowed to have her windfall of money, and she's allowed to keep the benefits that she has. It truly is the best of both worlds that a lot of people don't know that they can do.
Tom: She was already on disability, already on Medicaid. She has an automobile accident, and she's going to get a $300,000 settlement. Normally that $300,000 would cost her to lose those benefits. But by putting those proceeds into a special needs trust, it allows her to stay on disability and Medicaid and get the benefit of that money.
Robert: Absolutely.
[00:01:33] [END OF AUDIO]