Excerpt from: Shapiro Settlement Solution (click for full article)
Chances are you have been asked the question, “if I accept this settlement, will I lose my benefits?” When a client relies on Medicaid, Medicare, SSDI, SSI, HUD, SNAP (or any combination of federal and state government benefits) for income and healthcare coverage, there is much at stake. If proceeds are distributed without careful analysis and planning, the client may lose valuable benefits that are not easily replaced.
While there are several planning tools out there: spend down, special needs trusts, and structured settlements, none of them can be applied as a one-sized fits all solution. In creating the best plan many factors must be taken into consideration, including exact benefits received, future eligibility, injury/disability care plan, financial needs and individual family circumstances. Each benefit program comes with its own rules and each client situation comes with its own complications. With so many moving parts, creating a successful and practical settlement plan can often feel like assembling a puzzle.
If a client receives or has the potential of receiving government benefits, it is imperative to explore settlement planning options that protect benefit eligibility. Not only is it an attorney’s ethical obligation to present his or her client with the information necessary to make informed settlement planning decisions,[1] it is also the only way to protect the client from inadvertently losing his or her government benefits.
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