I had dinner a couple of weeks ago with a terrific trust officer from Wells Fargo trust services, who was frustrated that a personal injury settlement of several million dollars was divided into a large structured settlement and a very small special needs trust. Her client, the injured party, wanted to have a house, which would disqualify him from benefits he needed. There wasn't enough money in the trust to purchase it, and the structured settlement funds, if used, would disqualify him. If the settlement had been placed in the trust at the beginning, they wouldn't have this problem, and it was now too late to fix it.
People understand the power of special needs trusts much more than they used to, but it's a tricky area and not yet understood. I'll be speaking in August about this issue for parents, whether the funds are from themselves or from a settlement, at the NAPA Center in Los Angeles. If you'd like to know more, please contact Cassandra Hanson in our office at (626) 683-8869.
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