Television, movies, and the news have generally educated the public to know that if a person is injured in some way, due to the negligence or carelessness of another, that a lawsuit may yield a big money settlement or judgment.  However, the person doesn’t always receive that money.  

For example, a middle-aged man is in a terrible car accident that leaves him unable to care for himself.  His family has no choice but to place him in a nursing home that can provide 24/7 care.  His care is paid for by Medicaid.  If this man receives a money settlement or judgment, he will be disqualified from his Medicaid benefits.  The money settlement or judgment must then be used to pay the nursing home until the money is depleted to the point he is eligible again for Medicaid benefits.  

Generally, when a person is seeking a money settlement or judgment, the person is hoping to use that money to improve his or her quality of life with better medical equipment, staff, treatments, etc.  The person does not want to hand the money over to the nursing home.  

This situation can affect people of all ages.  Senior parents of middle-aged children may find themselves struggling with what to do in this situation. Parents of younger children may need to consider how to protect assets for a child in the event of the parents’ deaths.  

In such a situation, it is extremely important for the person or his or her guardian or power of attorney to contact a lawyer that can assist in preparing a special needs trust.  There are very strict laws and regulations on how the trust must be structured.  However, if done properly, the person can place the money in a trust that will provide for the extra things that will make his or her life easier or better.  

The only downside is that Medicaid can reimburse itself for monies it has spent on the person if there is money remaining in the trust at the person’s death.  Of course, the likelihood that any money will be remaining can be slim if the person lives for any substantial length of time.  Ultimately, the money can be used to make life as good or as comfortable as possible if the right steps are taken when a money settlement or judgment is received.

 Editor’s Note: Melanie B. Bradford is an attorney located in Scottsboro, Alabama at 803 Garland Ferry Road at the intersection of Veterans Drive and Garland Ferry near The Daily Sentinel. Her phone number is 256-259-3301. The Alabama State Bar requires any communication that may be interpreted as an ad to state: “No representation is made about the quality of legal services to be performed is greater than the quality of legal services performed by other lawyers.”

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