When a child with disabilities receives a personal injury settlement, parents face a crucial decision: how to manage these funds without risking essential government benefits. As a Cranberry Township trust lawyer, I help families protect their children’s financial future using special needs trusts, particularly after receiving personal injury settlements.
The Hidden Risks of Direct Settlement Payments
Many parents overlook how receiving a settlement directly can harm their child’s long-term interests. Settlements paid directly to a child or placed in a standard guardianship account often disqualify them from critical benefits like SSI and Medicaid. These funds may also need to be spent down before benefits can resume, which defeats the settlement’s purpose. Even court-supervised accounts, while intended to protect the funds, frequently become inaccessible when families need them most.
Why a Special Needs Trust Makes Sense
A special needs trust provides an effective solution to this problem. By placing your child’s settlement in a trust, you can preserve their eligibility for government benefits while ensuring the funds enhance their quality of life. These trusts offer professional fund management, long-term financial security, and protection from creditors.
One of the greatest strengths of a special needs trust is its flexibility. While government benefits typically cover only basic needs, the trust can pay for a wide range of supplemental care and services that significantly improve your child’s quality of life.
What the Trust Can Cover
Special needs trusts can pay for services and items that enhance your child’s life, including:
- Additional medical care and therapy
- Personal care attendants
- Educational opportunities
- Specialized equipment
- Transportation
- Entertainment and recreation
Professional Management Matters
At Sechler Law Firm, we focus on more than just drafting legal documents – we help families create a comprehensive plan for their child’s future. Our attorneys structure special needs trusts to meet all legal requirements while remaining flexible enough to adapt to your child’s changing needs. Professional management ensures the trust remains secure, serves its intended purpose, and avoids mismanagement.
Timing is Critical
Establishing a special needs trust before finalizing the settlement is crucial. By setting up the trust early, you can direct funds into it immediately, maintain benefit eligibility, and avoid unnecessary spend-down requirements. Early planning creates seamless protection for your child’s financial future.
Beyond the Settlement
Special needs trusts provide more than just settlement protection. They create a framework for long-term care and support by allowing contributions from family members, professional investment management, and proper fund usage throughout your child’s life. Think of it as a safety net that grows and evolves with your child’s needs.
Getting Started
If your child with disabilities expects a personal injury settlement, now is the time to explore your options. Contact our office at 724-841-1393 to schedule a consultation. We’ll evaluate your situation and design a plan that secures your child’s financial future. Together with your personal injury attorney, we’ll ensure the trust meets all legal requirements and protects your child for years to come.
