For claimants seeking to secure a portion of their settlement proceeds, a trust may be a suitable or necessary solution. 

Prindable Settlements offers comprehensive assistance in establishing and managing a trust, with a range of options available to meet specific requirements. Our support includes access to trust attorneys who can draft necessary documents and connections to highly regarded corporate trustees. We often pair a structured settlement with a trust to provide the trust a steady income so that the trust corpus can grow unencumbered.

Special Needs Trusts

A Special Needs Trust (SNT) is a type of trust established to provide for the needs of an individual with disabilities without affecting their eligibility for government benefits. It can be established by a claimant, a parent, grandparent, or court order and is managed by a trustee. The trust holds assets on behalf of the individual with disabilities, and the funds are used to pay for expenses such as medical care, education, housing, and other essential needs.

The trust is designed to supplement, not replace, government benefits such as Medicaid and Supplemental Security Income (SSI). The assets in the trust are protected from creditors and are not counted as part of the individual's assets for purposes of determining eligibility for government benefits. Medicaid does have the first right of recovery upon the death of a SNT beneficiary.

A special needs trust can provide peace of mind and financial security for individuals with disabilities and their families.

Who is eligible for a Special Needs Trust?

To be eligible for a special needs trust, an individual must be under the age of 65 and have a qualifying disability, as defined by the government. The individual must also have a demonstrated need for long-term care and support, and their assets must be below the maximum limit set by the government to qualify for benefits. In some cases, a court may also order the establishment of a special needs trust for individuals with disabilities who are receiving a settlement award.

Working in concert with our Trust Company partners, we can determine eligibility and ensure that the trust is established and managed in a way that protects the claimant’s government benefits and provides for their long-term needs.

Individuals who do not qualify for a First-Party SNT due to the age restriction may want to consider a Pooled Trust (sometimes referred to as a (d)(4)(C) trust). We work with providers of Pooled SNT’s, as well.

Managing a Special Needs Trust

A special needs trust is managed by a trustee, who is responsible for investing and distributing the assets in the trust. The trustee must act in the best interests of the individual with disabilities and ensure that the trust is used to supplement, not replace, government benefits. The trustee must also abide by the terms of the trust agreement and any applicable laws and regulations.

The trustee can be an individual, a corporation, or a professional trustee. The choice of trustee will depend on the specific needs and circumstances of the individual with disabilities and their family. For example, a family member may be appointed as trustee, or a professional trustee may be appointed to provide impartiality and expertise in managing the trust assets.

It is important to carefully consider the qualifications, experience, and reputation of the trustee when selecting a trustee for a special needs trust. We can provide guidance on the best choice for your unique situation.

Minors’ Trusts

Minors' Trusts can play an important role in lawsuit settlements involving minors. If a minor is the recipient of a settlement award, and he or she is in need of immediate access to money for medical or education expenses, the court may require that the funds be placed in a trust for the benefit of the child until they reach the age of majority. This is done to protect the child's financial future and ensure that the funds are managed in a responsible and appropriate manner.

In such cases, the Minors' Trust is typically established by the court and by agreement of the parties involved in the settlement. The trust will have a trustee, who is responsible for managing and investing the assets in the trust for the benefit of the child. The trustee must act in the best interests of the child and must abide by the terms of the trust agreement and any applicable laws and regulations.

The Minors' Trust can provide a secure and controlled environment for the settlement funds, ensuring that the child's immediate needs are balanced by the future financial needs and that the funds are not spent recklessly or prematurely. This can provide peace of mind for the child and their family, knowing that the settlement award is being managed in the best interests of the child.

Settlement Preservation Trusts

Settlement Preservation Trusts provide security for claimants by safeguarding against imprudent spending while still enabling access to funds for necessary expenses. These binding trusts typically have a set termination date, after which the funds become accessible to the beneficiary. The management of the funds within a Settlement Preservation Trust can be overseen by either an individual trustee or a corporate trustee. These types of trusts are popular with young adults receiving large settlement awards.

Reversionary Trusts

A reversionary trust is a type of trust that is established as part of a lawsuit settlement to manage and preserve settlement funds for the benefit of the recipient. The purpose of a reversionary trust is to provide long-term financial support for the recipient, while also protecting their eligibility for government benefits such as Medicaid or Supplemental Security Income (SSI).

One unique aspect of a reversionary trust is that the remaining funds in the trust revert back to the defendant (the party responsible for the injury or harm that led to the settlement) or another designated party if the recipient dies or the trust is otherwise terminated. This is different from other types of trusts, such as a revocable trust, where the remaining funds would typically be distributed to the recipient's estate or to a designated beneficiary.

Reversionary trusts are typically established in personal injury or wrongful death settlements involving the U.S. Government. The reversionary trust allows the recipient to receive long-term financial support, but the reversionary condition is generally negotiated at the time of settlement by the attorneys.