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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  In fact, the injured party may be in a far worse financial position once the benefits are withdrawn if they exceed the value of the resources obtained via an award or settlement.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:

  1.  The injured party to enjoy an improved quality of life through the receipt of the settlement funds and the retention of the benefits;

  2.  The defendant to terminate any future exposure following the settlement; and

  3. 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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