If someone in your family has suffered a serious injury, you may be thinking about filing a personal injury suit against the individual who caused or contributed to his or her injury. Doing so often makes sense, as your loved one should not have to bear all the consequences of someone else’s negligent or reckless conduct.
While personal injury suits sometimes result in large cash settlements or jury verdicts, they often only provide minimal compensation. Still, this compensation is usually enough to make a person ineligible for means-tested government assistance, such as Supplemental Security Income or Medicaid.
Setting up a payback trust
There may be a way to ensure your loved one remains eligible for needs-based financial assistance while still benefiting from his or her financial settlement or jury award. With a payback trust, funds from the settlement do not count as income for purposes of qualifying for public benefits.
Using the trust for special expenses
Living in Oregon is not exactly inexpensive. In fact, according to SoFi, it costs nearly $43,000 per year just to survive in the Beaver State. If your loved one lives in a tony region of Oregon, he or she may need substantially more, of course.
Even though public benefits may cover some living expenses and basic medical care, they do not pay for much else. With a payback trust, your relative can use funds in the trust to cover special expenses, such as home improvements, travel and even tuition.
Ultimately, if your loved one wants to take full advantage of both a financial settlement and public benefits, establishing a payback trust may be advisable.