Structured settlements can be very helpful after a lawsuit. Unfortunately, many personal injury cases result in a person sustaining disabilities that impact them physically and mentally. In this case, establishing a special needs trust and funding it with a structured settlement may be beneficial.
There are numerous benefits associated with structured settlements and using them with a special needs trust. Below, we’ll detail how the two work together and the benefits of receiving a structured settlement.
How Does a Structured Settlement Work?
In a personal injury or civil action lawsuit, a structured settlement is often offered in lieu of one lump sum. In most situations, the payments a person receives from a structured settlement are not part of their income, and they are not subject to taxes in the same way that normal income is.
Structured settlements that pay into a special needs trust are not considered a detriment to government benefits. Most importantly, if something happens to the person receiving the structured settlement payments, the remaining payments may go to a designated heir without tax implications.
Can I Use a Structured Settlement to Fund a Special Needs Trust?
Structured settlements are very beneficial to use as part of a special needs trust. First, the payments from a structured settlement can provide a stable income without impacting eligibility to receive government aid. Second, there are no problems with taxes, making it one of the best ways to fund a special needs trust.
At Legacy Enhancement Trust, we work to help our clients understand their options. We offer a wide array of services, so no matter what your needs are, we will find the right solution for you. If you are set to receive a structured settlement, we’ll help you understand how to move forward effectively and create a special needs trust that suits your objectives.
Call us today at (888) 988-5503 and learn what options you have with our team at Legacy Enhancement Trust.