Special Needs Settlement Planning (SNSP) is a comprehensive array of legal services intended to assist injury victims and trial lawyers in the process of settling claims. SNSP combines traditional tools, such as Special Needs Trusts for persons with disabilities, with a thorough evaluation of the complex issues that arise in cases involving injury victims. SNSP experts can provide injury victims with a customized settlement plan that not only preserves public assistance benefits when necessary, but also addresses all aspects of life-care needs and estate planning concerns. At the same time, SNSP services allow trial lawyers to focus on the liability aspects of the case and reduce the malpractice risk.
1. How Can SNSP Attorneys Help If the Plaintiff Receives Government Benefits?
- Identification of Government Benefits Programs. SNSP professionals can assist in identifying which public assistance programs an injury victim with a disability is receiving and the types of issues those programs present.
- Special Needs Trusts. If the injury victim receives means-tested public assistance, SNSP attorneys can help create a Special Needs Trust in order to retain those benefits after the settlement is received, and can tailor the trust to the specific needs of the client.
- Lien Resolution. In many cases involving injury victims with disabilities, settlement proceeds are subject to Medicaid liens as well as conditional payments made by Medicare. SNSP lawyers can assist in identifying and resolving such liens in the process of settling a case.
- Medicare Set-Aside Arrangements. Recent developments have raised the importance of addressing the Medicare Secondary Payer (MSP) Act, which requires that Medicare’s interest be considered whenever a Medicare beneficiary (or potential Medicare beneficiary) receives a settlement involving payment for future medical expenses. SNSP attorneys are at the forefront of this emerging area, and can advise trial lawyers and the injury victim about the possible need for a Medicare Set-Aside arrangement.
- Financial Planning. SNSP attorneys can add valuable perspective and bring in financial planning experts to best prepare a financial plan that will meet the lifetime needs of the injury victim. This can include a structured settlement along with a well-balanced portfolio of acceptable investments. Additionally, SNSP professionals can help coordinate a proposed structure with a Special Needs Trust, and ensure that the payee and beneficiary designations for a given structure comply with state and federal public benefits laws.
- Tax Planning: SNSP professionals can identify and resolve an injury victim’s income tax issues that may result from a settlement that includes numerous causes of action. In larger settlements, the SNSP professional can minimize probable estate tax concerns with a plan that will comply with the injury victim’s needs.
2. How Does the SNSP Attorney Get Involved with the Court?
- Settlement Approval. Frequently proposed settlements for injury victims with disabilities or for minors require approval by the probate court. SNSP attorneys offer expertise in efficient approval of proposed settlements, including approval of attorney’s fees and costs. Often, requests for court approval of settlements can be combined with requests for the creation of Special Needs Trusts, Medicare Set-Aside arrangements, and/or the creation of conservatorships or guardianships.
- Identification of Appropriate Fiduciaries. SNSP professionals can be valuable in identifying appropriate fiduciaries to manage settlement funds for injury victims with disabilities or for minors. Each case presents a unique set of issues, and often identifying a trustee or conservator with the right mix of knowledge and experience is critical.
- Conservatorships and Guardianships. In many cases a conservatorship or guardianship is required to provide court oversight of the settlement funds of an injury victim with disabilities’ or a minor. SNSP professionals are experienced in the creation of conservatorships and can combine the process with a request for settlement approval, and creation of a Special Needs Trust and/or Medicare Set-Aside arrangement.
- Qualified Settlement Funds. The Internal Revenue Code allows settlement funds to be placed into a Qualified Settlement Fund (QSF) while the details of a settlement are being worked out. The funds sit in the QSF while issues such as resolution of liens, creation of trusts and development of a financial plan are worked out. Funds held in a QSF are not considered to be available to the injury victim, so constructive receipt issues are avoided. Defendants can make payment into a QSF and complete their involvement in the case. SNSP professionals are familiar with the state and federal laws governing QSFs, and can navigate the process of creating them in appropriate cases.
3. What Is the SNSP Attorney’s Role After the Case Is Over?
- Ongoing Advice to Fiduciaries and Family. SNSP professionals provide ongoing legal advice to trustees of Special Needs Trusts, conservators and other fiduciaries. Because these fiduciaries are often required to follow state trust law and both state and federal public benefits laws, ongoing legal representation is useful. SNSP attorneys assist fiduciaries in determining whether certain expenditures are appropriate, seek court authority for certain large purchases such as a home or specially-equipped vehicle, and prepare the required accountings and other documents. SNSP attorneys also provide ongoing advice to families of the injury victim with disabilities.