Persons with disabilities receiving cash or other assets — successful litigants in personal injury actions, for example — must take care to shelter the cash or assets received when they are also recipients of needs-tested public benefits such as Supplemental Security Income and Medicaid (known as “Medi-Cal” in California).
This is due to a rule, typical of many programs, limiting assets for public benefits recipients to no more than $2,000, exclusive of certain exempt assets such as a car or residence. For a number of reasons, a litigant with disabilities will often elect to shelter the funds in a special needs trust. The successful litigant, establishing a special needs trust with his or her own assets, would be both the grantor (or settlor) and the beneficiary. The resulting special needs trust is referred to as a “first party,” “self-settled,” or “(d)(4)(A)” special needs trust.
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