Pursuing Peace Of Mind For You And Your Family

How may a structured settlement help a special needs person?

A recent automobile accident has left your child with disabilities that make it impossible for your loved one to be self-sufficient. You may worry about how to provide for your child in the years to come. If you end up in litigation with the party responsible for the accident, a structured settlement may become an option.

It is possible you will come to a settlement or a court may award you damages. The form of the settlement or compensation will be important as you might not want your child to receive the full compensation all at once.

The problem of a lump sum payment

Your child may be eligible for federal disability benefits provided that your loved one does not exceed asset thresholds. If your son or daughter has too much money or other assets, the federal government might deny benefits. This could happen if a court judgment awards damages to your child in a lump sum.

How a structured settlement works

As an alternative to a lump sum, you might consider asking for or negotiating a structured settlement. Smart Asset explains that under a structured settlement, the responsible party pays damages into an annuity instead of directly to your child. You can work out a schedule to pay your child amounts from the annuity on a specific basis.

By having an annuity pay smaller amounts of money, you could avoid disqualifying your child from Medicaid or other benefits. As an added benefit, the payments should not incur taxes.

Structured settlements and planning

People struggling to help a special needs child should know that different options exist. You might harmonize a structured settlement with your other plans, like using settlement money to fund a special needs trust. Since disabled individuals have varying needs, whatever options you pursue should fit the current situation of your family.