2023 marked one of the largest and most successful years for the structured settlement industry. See NSSTA Announces Record-Breaking $8.623 Billion Industry Milestone in 2023 | National Structured Settlements Trade Association. According to the National Structured Settlement Trade Association (NSSTA), of which this author is co-chair of the Legal Committee, a staggering 29,810 people—all of whom victims of injury or survivors of wrongful death victims—received the benefit of a structured settlement. This author has written on the benefits of structured settlement annuities previously, and those benefits are bountiful. Structured settlements provide customized, stable, and most times tax free income to payees. Often, the periodic payments available under a structured settlement annuity will be payable for as long as the payee shall live, providing a protected and steady income stream.

Of the 29,810 people who will benefit from a structured settlement annuity sold in 2023, thousands are likely the beneficiaries of "special needs trusts." Special (or supplemental) needs trusts (SNTs) are a type of trust that allows the beneficiary, who is often times a minor; and incapacitated in some way, the ability to receive the property held in the SNT while, at the same time, maintaining eligibility to receive needs-based government benefits, like Medicaid. See Your Special Needs Trust (SNT) Defined | Special Needs Alliance. Usually irrevocable in nature, most states have established specific statutes under which each SNT must comply. The applicable federal law that governs SNTs is found at 42 U.S.C. Section 1396p(d)(4)(A). SNTs are usually for the most vulnerable of structured settlement payees as a trusted means of asset protection. SNTs will receive the periodic payments directly from the annuity issuer, and the SNT trustees have a fiduciary duty to spend the trust situs for the benefit of each beneficiary. Many SNT trustees are professional trust companies, which those who have set up the SNT in the first place believe will be best suited to ensure that the periodic payments are protected, and funds disbursed only when needed for the best interest of the beneficiaries. The daily needs of SNT beneficiaries span a wide spectrum, but there are some beneficiaries who rely on periodic payments paid through a structured settlement annuity for their very daily survival, i.e., paying for round-the-clock skilled nursing care, life supporting machinery, and even housing and transportation to medical appointments. Arguably, this imposes a heightened burden and duty upon the trustees of SNTs to ensure that the funds in the SNT (and paid to the SNT in the future) are appropriately handled and responsibly disbursed on an as-needed basis only. With pooled SNTs, after a beneficiary agrees to join in the trust, separate subaccounts are maintained for each beneficiary tracking what assets were contributed to the trust, but trust assets are pooled in a master trust account, which in theory allows for better investment opportunities and lower administrative costs. A fundamental distinction is that the beneficiaries' heirs at law will not receive any funds remaining deposited into the pooled SNT at the beneficiaries' death.