Many people are in the position to place all or a part of their settlement proceeds in a trust. There are several different kinds of trusts to consider, each with a specific set of requirements. To choose the best option for your circumstances, it’s important to understand the pros and cons of different kinds of trusts. Jay Scarola is an expert settlement consultant with extensive experience assisting with every step of setting up and managing a trust. He is there for you every step of the way, from connecting clients with a national network of top trust attorneys to draft trust documents to offering access to reputable nationally chartered corporate trustees.
Typically courts approach minors’ settlements in a conservative manner. Depending on the discretion of the judge and the jurisdiction it falls under, settlement options may include a structured settlement annuity, a trust account, a registry of the court, or a guardianship account. If a minor’s trust is established, we recommend having documents drawn up by a specializing attorney to adhere to local requirements for court approval. After the trust is funded, a trustee must be appointed to manage the trust for the benefit of the minor.
Special Needs Trusts
Injured claimants currently receiving needs-based government benefits (such as SSI or Medicaid) may lose benefits eligibility if their proceeds are settled in a lump sum payment. Injured claimants may then face a mountain of continued medical costs that can be swiftly depleted by medications, surgeries, doctor bills, therapy, and necessary home modifications to accommodate their disability.
If set up and managed appropriately according to state regulations, a Special Needs Trust (SNT) can protect against interruption in needs-based government benefit eligibility. The trustee must be well-versed in the regulations of an SNT, as eligibility may be jeopardized.
Settlement Preservation Trusts
Settlement preservation trusts are binding trusts protecting the claimant’s settlement from irresponsible spending while still drawing funds for necessities. These trusts generally stipulate a termination date where funds are opened to the beneficiary. Funds in a Settlement Preservation Trust are managed by an individual or corporate trustee.
Medical Custodial Accounts
If a client needs medical services not covered by Medicare or insurance, a Medical Custodial Account can be employed to gather and dispense settlement funds to handle medical expenses. This type of professionally administered trust account is often utilized by Medicare Set-Asides.
This provisional trust is available under certain jurisdictions. The plaintiff draws the necessary funds to cover lifetime medical expenses. After the plaintiff passes away, the remaining funds go to the defendant.
Contact Us Today
Jay Scarola has spent the last two decades helping catastrophically injured clients optimize their settlement proceeds through the long-term financial stability and security of a structured settlement. If you are seeking to establish a structured settlement, you may need a console to maximize financial security. Call Jay Scarola to talk about settlement trust services today.