Personal Injury Trusts

The Gatesman Law Office works with personal injury lawyers to assist their clients in protecting the assets they recover for their clients. Sometimes, it is prudent to utilize a special trust to protect any public benefits the injured party may be getting. If, for example, the client is eligible for Supplemental Security Income (SSI) and Medicaid, using such a trust is essential. Without the trust, the client will lose both SSI and Medicaid.

Some clients, instead of getting SSI disability income, instead receive Social Security Disability Income (SSDI) and Medicare. If that is the case, then using a special trust may not be necessary.

The type of trust that allows the client to retain her disability benefits requires that Medicaid be paid back after the client dies. Also, there are restrictions on how the trust fund may be used. Therefore, it is more advantageous to the client to avoid having to use such a trust.

But lawyers must be careful. One cannot simply assume that it is ok to distribute a personal injury award to a client without using a trust just because that individual receives SSDI and not SSI benefits. This is because some people who get SSDI also participate in the Qualified Medicare Beneficiary (QMB) program. QMB will pay all the insurance premiums and co-pays for the client, and may cover the cost of a drug insurance contract. QMB, however, is a Medicaid program, and a client who receives too many assets or income outside of a trust could lose his QMB benefits. This could be disastrous to a client who has very high drug costs.

Sometimes, personal injury lawyers will negotiate what is known as a “structured settlement” which essentially is an annuity that makes regular monthly payments to the client. For those clients who get SSI and Medicaid, such annuity must be structured so that all income payments after age 65 must be paid to the State of Maryland rather than to the client. While this may be beneficial for a client who, but for the annuity, would lose his substantial drug insurance coverage, it is not the best solution for all people, especially those who receive SSDI but do not receive QMB benefits.

This alphabet soup of public benefits programs presents a minefield for personal injury lawyers trying to get the best settlement for their clients. The Gatesman Law Office stands ready to assist them and their clients with choosing the best overall financial settlement to achieve their client’s objectives.