Establishing a Trust

When a person settles a personal injury lawsuit, it’s usually the largest sum of money they will ever get at one time. Because the courts want to protect an injured person from squandering their funds or from the designs of manipulating third parties, some type of protective trust is usually involved.

Here are some important things to consider when going through this process:

If the injured person is incapacitated and cannot make decisions, a court will almost always require a trust be established.
If the injured person is a minor, a trust usually will be required. Just because you are a parent of an injured child, don’t assume you will be allowed to act as trustee, especially if a large sum of money is involved.
A Trust can come in many forms, with many options. It’s important to become educated on the types of trusts that are available and how they work far in advance of mediation or settling a case, because frequently the terms of the settlement can lock in the trust term unknowingly to the injured person.

There are many different types of trustees all over the country and you should interview several far in advance of receiving your money to find out the trustee’s views on managing your money.

Here are some examples:

Does the trustee specialize in working with individuals with long term disabilities?
Will the trustee allow the purchase of a home? A car? Can the family use the home and car? Vacations?
What is the history of the trust company? It’s financial strength?
Will the trust company let you select your own financial advisor to invest your money?
What are the trustee’s fees?
The financial planner’s fees?
Do they have a quick response time for requests or is there a certain threshold that requires a committee to approve an expenditure?
Will the trustee pay for medical procedures outside the United States?
Will the trustee pay for medical procedures that are not FDA approved?
How easy or difficult is it for the trustee to be removed by the injured person or his surrogate?
What does the family have to say about how the trust is administered?
Does the trustee use a law firm and what are the fees charged by the law firm against the trust fund?
What type of support staff or resources does the trustee employ to handle daily care and medical needs?
Do they have a hotline to call for quick answers?
Is the trustee dynamic in the planning alternatives for the injured person or do they stick to boilerplate trust documents that are inflexible and not customized for the injured person and his family’s personal situation?

Hiring a trustee to oversee a large financial settlement is an important decision that should not be done at the last minute. Injured people and their families should be prepared to select a trustee and build an estate plan around the trust prior to settling the case or even attending mediation.

Special Needs Trusts

A Special Needs Trust can be an invaluable tool for a disabled person to “own” assets which would normally exceed the low limits required by Medicaid and SSI programs, without losing the benefits of these important programs. A Special Needs Trust can be drafted in various ways but requires the following:

The Trust must be established by the court, parent, grandparent or guardian of the disabled person for his or her sole benefit;
The Trust must be funded prior to the disabled person’s 65th birthday;
There must be a “payback” provision to reimburse any State who provided care through its Medicaid program upon termination of the Trust.

When assisting plaintiffs desiring to use a Special Needs Trust, we interview the client as well as any other relevant people (such as family, caregivers, professionals, etc.) and determine the goals and draft the Trust along with any supporting documentation. We also assist the client with understanding choices regarding what assets to place in the trust as well as how the trust will work on a daily basis.

We interface with all relevant government organizations to have the trust approved, and will attend court hearings on the client’s behalf to finalize everything in order to get the trust up and running. Our assistance does not stop there, as we are available for continued support as needed as things arise in the future.

How We Can Help

Protect Your Benefits

Supplemental Security Income and Medicaid play a key role in providing life sustaining benefits to many people in this country, particularly the disabled. There are very strict asset and income guidelines to maintain eligibility for these programs. Many injured plaintiffs would lose these important benefits without advance planning.

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Protecting Your Home

Protect Your Benefits

One of the most common requests we receive from clients and their families when they are accepting a monetary settlement is, “Can we buy a home?” While in the majority of cases, the answer is “Yes”, the means by which a home can be purchased or built can vary greatly - with equally great variations in how the home can be titled, used, and ultimately passed on to family members.

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Tax Planning

Protect Your Benefits

Tax Planning

Anytime there is a significant windfall of money, there are tax issues to follow. Unfortunately, as plaintiffs approach a settlement, there is usually very little discussion about tax planning beyond whether or not the actual receipt of settlement funds is taxable. This initial analysis is only the first level of tax analysis to properly plan for the injured person’s well being in the future.

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Establishing a Trust

Special Needs Trusts

How We Can Help

Protect Your Benefits

Protect Your Benefits

Protect Your Benefits

Protecting Your Home

Protect Your Benefits

Protect Your Benefits

Tax Planning

Protect Your Benefits

Tax Planning

No Fee Unless Your Case Settles

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Julian Gray Associates