Managing Legal Settlements

By Neal A. Winston, CELA, Special Needs Alliance®

There are many factors to consider when a family member is seeking legal compensation for personal injuries, whether they result from medical malpractice, a car or workplace accident, or some other mishap. Given the supports that an individual with disabilities might need throughout life, even large sums can prove insufficient and must be carefully managed. Personal injury attorneys are often unaware of how a settlement can affect an individual’s eligibility for important public benefits, and families should ensure that a special needs attorney is consulted as early as possible during the course of their suit.

Liens and Set-Asides

Although personal injury awards are usually not taxable, there may be various liens against the settlement which must be satisfied before putting the money to other uses. If Medicaid, Medicare or, in some cases, private insurers have been paying for injury-related care that has been compensated as part of the settlement, they may need to be reimbursed.

In addition, if the individual is currently on Medicare, or is likely to become covered within 30 months, it may be necessary to create a Medicare Set-Aside (MSA) arrangement. While government guidelines are currently unclear, this can have implications for settlements of $25,000 or more, and legal counsel should be consulted.

Assessing Needs

A candid evaluation of the individual’s short- and long-term needs should guide the family in determining how to manage the remaining funds. Of major importance is whether or not means-tested public benefits such as Medicaid and Supplemental Security Income (SSI) will be required. If such programs will play a role, steps should be taken to ensure that settlement funds won’t disqualify the individual from such programs.

Depending on the size of the settlement and immediate needs, it may be possible to quickly “spend down” the award so that its effect on benefits is short-term. Home renovations to improve accessibility or purchase of a van are among many possibilities.

Another option for smaller settlements is placing up to $14,000 per year in an ABLE account for the individual. Funds held in such accounts are not considered when evaluating someone’s eligibility for Medicaid and SSI and can be used for a wide array of needs relating to the person’s disability. A person is limited to a single ABLE account, the disability must have begun before age 26, and the person must be receiving SSI or Social Security disability benefits, or have a doctor’s diagnosis of a disability meeting Social Security’s definition. If the account balance exceeds $100,000, SSI payments will be suspended, but Medicaid services continue. The maximum value of an ABLE account for Medicaid eligibility without SSI is the same as the maximum value of a 529 college savings account in the state in which the ABLE account is opened. Be aware that upon the beneficiary’s death, funds remaining in an ABLE account must be used to pay back Medicaid for any services rendered on the individual’s behalf after the ABLE account is created.

Larger settlements should be protected in a first party special needs trust (SNT) or a “pooled” SNT account.  While individual first party trusts are administered by trustees chosen by the beneficiary, pooled SNTs are administered by nonprofit organizations.

Like an ABLE account, a first party SNT must reimburse Medicaid upon the beneficiary’s death. In some states, part or all of a pooled trust’s remaining funds revert to the administering nonprofit. Any funds left must then reimburse Medicaid before being available to other beneficiaries.

Distributions

Distributions from a first-party SNT are regulated and must be for the exclusive benefit of the individual for whom the trust has been created. If the money is used for food or shelter, it will reduce SSI payments up to a certain limit. The beneficiary cannot have any individual control over distributions from the trust.

Consideration can be given to reimbursement or compensation from the settlement to third parties in certain circumstances and using the proper procedure without causing benefit program penalties. For instance, a family may have run up significant debt while caring for the injured person. They may have resorted to credit cards or borrowed from friends and relatives. If someone gave up a paying job to care for the individual, they may need to be paid for their services to compensate them for lost pay from their regular work. These are all expenses that might properly be handled with settlement money and are best handled prior to creating the SNT. Money should be held in an escrow account, and payment should be made directly to those to whom the money is owed. Benefit programs have different rules, but most involve a written agreement or understanding reached before the services were rendered for the reimbursement or compensation in order to avoid penalties. Funds passing through parents’ hands could also affect eligibility for benefits. If the individual is a minor or an adult with a guardian or conservator, court approval may be required to make any reimbursement.

Even if government benefits are not a consideration, the beneficiary may need assistance managing the award, in which case a settlement protection trust similar to an SNT, can be established. If initially drafted properly, it may be converted to an SNT at a later date, if necessary.

Investments and Award Management

Trustees have discretion to make a wide range of investments. These might include traditional investment accounts, government insured or guaranteed accounts, life insurance or even real estate, either to produce income or to provide a residence for the beneficiary. Generally, the accounts should only invest in moderate or lower risk entities, and the funds should never be loaned to the trustee or family members. Many states have regulations that control investments and distributions from SNTs and other trusts.

For larger awards, structured payments for a portion of the settlement may be considered. This requires the defendant or his/her insurer to purchase, at the time of the settlement, an irrevocable annuity for the beneficiary that guarantees specific periodic or lump sum payments over an agreed-to period of time. If the timed payments will be large enough to affect eligibility for benefits, arrangements should be made for them to be paid into an SNT and/or an ABLE account.

On the plus side, structured payments are exempt from income tax and have scheduled payouts that ensure that money will continue to be available for a stated period. On the other hand, with interest rates at historic lows, the beneficiary may be locked into long-term dependence on low-performing investments.

Seek Advice

The options for handling a legal settlement are many, with interrelated implications. Families should ensure that a special needs attorney is part of their legal team to ensure that eligibility for means-tested benefits is not jeopardized and other disability-related issues are addressed.

 

The Special Needs Alliance (SNA)® is a national non-profit comprised of attorneys who assist individuals with special needs, their families, and the professionals who serve them. SNA is partnering with The Arc to provide educational resources, build public awareness, and advocate for policies on behalf of people with intellectual/developmental disabilities and their families. A free manual, “Administering a Special Needs Trust: A Handbook for Trustees,” can be downloaded from the SNA website.

Chapter Volunteers Reduce Food Insecurity Through Community Service

meals-on-wheels-volunteersBy Nancy Stubbs, Development Director, The Arc Nature Coast

On October 16th, we recognize World Food Day. According to the Corporation for National and Community Service (CNCS), 49 million people in the United States – including 16 million children, do not have reliable access to affordable, nutritious food. Providing food assistance is one way that communities can help improve all people’s access to healthy food. Through funding from CNCS, The Arc helps 10 chapters around the country organize service projects that aid community members in need.

Our chapters partnered with local service clubs and hunger-focused groups (e.g., community food banks, food pantries, soup kitchens) on events around the 2016 and 2017 Martin Luther King, Jr. Day of Service, and throughout the year to provide food assistance to community members who experience food insecurity. In the first year of funding, our chapters have recruited 690 volunteers who have contributed over 5,360 hours of service to feed over 9,833 people in need.

One such chapter, The Arc Nature Coast in Brooksville, Florida, addressed their lack of access to nutritious food by delivering local produce to nearby food banks, which typically serve canned and/or processed foods. First, The Arc Nature Coast met with local farmers to learn what fresh fruits and vegetables were in season. Next, The Arc Nature Coast partnered with the farmers to distribute fresh produce to 235 recipients at four different food banks. Additionally, The Arc Nature Coast partnered with their local Meals-on-Wheels program to deliver meals to senior citizens on a weekly basis.

Both projects enabled individuals with intellectual/developmental disabilities to work alongside farmers and volunteers. Feedback from volunteers with disabilities has been very positive, and suggests that participation had a positive effect on their self-esteem and feelings of inclusion. One volunteer stated, “They (recipients of Meals on Wheels) are counting on me to be there to bring them their food. They wouldn’t have food to eat if I didn’t help them.” Another added that, “it makes me feel good to help people.”

The Arc, Other Advocates Launch Modern Medicaid Alliance

Washington, D.C. – Despite the enormous societal and economic benefits offered by the modern Medicaid program, a lack of dialogue about the true value of the program drives misperceptions relating to it.  Today, an alliance of more than two dozen national advocacy organizations formally launched with the aim of educating the public and policy makers  about the Medicaid program and its importance for the more than 70 million Americans covered by it.

The Arc joined advocates for low-income Americans, children’s health and well-being, people with mental illness, people with disabilities, health care providers, and business organizations today in announcing their participation in the Modern Medicaid Alliance (MMA). A list of the members of the Modern Medicaid Alliance can be found here.

From lowering health care costs to delivering better health outcomes for beneficiaries, Medicaid keeps our nation healthier and enables more citizens to have access to affordable, quality healthcare so they can care for their families and be productive in the workplace. The largest health care program in the country has also become a proven laboratory for innovation as cash-strapped states have sought solutions for difficult population health issues. Despite its positive impact on tens of millions of people and America as a whole, the need for greater awareness among policymakers and the public about the value of our investment in it remains high.

“Medicaid is the backbone of our system of services and supports for people with intellectual and developmental disabilities, and the critical role it plays in providing long term services and supports is often overlooked.  We welcome the opportunity to be a voice for the vital role the program plays in providing health care and assisting people with I/DD to live and work in the community,” said Marty Ford, Senior Executive Officer for Public Policy at The Arc.

More Veggies and Fruits Please!

fruitObesity has been a large problem in our country for several years now, and affects both people with and without intellectual disabilities (ID). Through The Arc’s HealthMeet project, which has conducted health assessments on over 1,000 individuals with ID in its first two years, 35% were in the obese category and 11% were in the extremely obese category.

According to ChooseMyPlate.Gov, half of your meals should be fruits and vegetables. While this sounds easy, many people do not meet these goals in their daily eating habits. Fruits and vegetables provide a lot of vitamins and nutrients—vitamin A, C, potassium, and iron to name a few—that our bodies need daily. They are also naturally low in fat and will help to fill you up without all the additional calories, so feel free to eat as much of them as you’d like! Just be careful about extra toppings that you may add on. For example, make sure not to add an excessive amount of butter or cheese to things like broccoli or brussel sprouts, and use salt sparingly.

Below are a few easy ways to help increase your fruit and vegetable consumption throughout the day.

  1. Smoothies: make them in the morning for breakfast or as an after-dinner treat. You can use a variety of fruit and even add in some vegetables as well. Add a little kale or another green leafy vegetable in a smoothie to help increase nutrients even more.
  2. Fruit/Veggie Appetizers: most people come to the dinner table ready to eat. Have some cut up carrots, peppers and hummus out for individuals to snack on when waiting for dinner. Having some time to snack on the appetize will allow that food to digest in their bodies before dinner and will help to fill them up on healthier options so that they will be less likely to go back for seconds once they have finished their plate. When individuals eat too fast their bodies don’t have time to realize that they are full. Spreading the meal out with a healthy appetize of vegetables in the beginning allows for more time for the body to recognize it’s getting full and send these signals to the brain.
  3. Disguise them!: Add slices of fruits and vegetables to items you wouldn’t usually add them in or just haven’t before. Finely chop zucchini, squash, or eggplant and add to spaghetti sauce – they won’t even notice! Salads and sandwiches can be enriched with slices of apples, grapes, kale, cucumbers, carrots, peppers, and more.
  4. Drink them: Fruit juice can be a great way to get easily add in some extra fruits. However, make sure that it is “100% fruit juice” as other juice drinks can use a lot of extra sugars to sweeten and flavor them.

Making sure to offer a variety of fruit and vegetables to choose from will help determine what kind of foods individuals like. Buying fruit fresh is a great idea, but fruit that is frozen or canned will still provide a lot of needed vitamins and may be easier to store and prepare. Make sure canned/frozen fruit doesn’t use any extra sugars or syrups added to preserve it, as that can add a lot of extra calories. Try cooking vegetables in an array of different ways – raw, steamed, baked, grilled, etc. An individual might not like carrots because they are too hard to chew, but if you steam them and make them softer it could be something that they enjoy eating.

Check out The Arc’s HealthMeet webinars for more information about nutrition and eating healthy.

Fatherhood: How Zachary Shapes My Life

Zachary and RayRay Morris is a father of two – Zachary and Tyler. Zachary, his 27 year old son, has intellectual and developmental disabilities. Ray is the founder of Dads 4 Special Kids, a member of The Arizona Developmental Disability Planning Council and an Engineer/Paramedic with the Scottsdale Fire Department. This Father’s Day, we chatted with Ray about what it means to be Zachary’s dad and how Dads 4 Special Kids plays an important role in his life.

For you, what does it mean to be a father of a son with a significant disability?

I am blessed to be Zachary’s father, he’s the right son for me and I’m the right dad for him. It doesn’t mean things are perfect but we’re both growing. We share a special and unique bond that enables us to have a deeper love. Zachary didn’t do the typical things that a child does like play baseball or football. I had to learn his value system and what’s important to him. When I go into his room in the morning and he sits up and looks up or when he lays his head onto my shoulder and just relaxes, I know that he is happy by the way he responds to me and embraces me in his style. It is a privilege and honor to receive his love.

Society gets locked into the importance of being the mom or dad of an NBA player. That’s wrong. It is the relationship between the dad and the child that’s important. When you have a child with special needs, it’s not about the accomplishments of the child or about what he is going to do. It’s an unconditional love for each other no matter what and supporting your child to live life to their level.

Did you always feel that way?

No, I went through a period of adjustment between what my life had been and the future vision I had for Zachary. Reality wrote another script. Zachary was born with a rare brain disorder and began having seizures around age four. I had to deal with my own shock and grief in my way. I had to learn to identify how I felt about Zach, how I felt about this new life, and take ownership of those feelings. Kelly my wife had to do the same, then we could help support each other deal the emotions.

Do you have other children?

Zachary is 27, and my other son Tyler is 25. Being Zachary’s father, I am very mindful of Tyler’s feelings and his upbringing. As Zachary’s sibling, I’m witnessing Tyler becoming a man with a great sense of compassion for others that accepts the individual not just the physical attributes.

How else has your life changed since Zachary was born?

Before Zachary was born, I used to love adventure racing. However, training for those events took too much time away from my family. Although that chapter of my life has closed, I am fully aware that self-care is important and I am now involved in recreational soccer. It takes less time away from my family and I can play in an adult soccer league with Tyler. I value my relationship with my wife, Zach and Tyler. I’ve learned that I can’t make them happy. However, I can be involved in the things that are important to them and support their happiness.

How has your wife supported you on this journey?

Kelly, my wife, wants to support me, but we deal with our emotions differently. It’s like my wife has a PhD in emotional expression, and I am in grammar school. We’ve had some challenges learning how to express and listen to each other’s emotions. It’s also challenging not to take ownership of each other’s emotions. Thanks to Kelly’s support, I wouldn’t be the husband, father, and man that I am today.

Tell us about Dads 4 Special Kids.

Dads 4 Special Kids is a support group for fathers. We have monthly meetings where dads can come together to talk. We also have one meeting that includes breakfast. Dads can bring their kids and not worry about how others will react if the kids start acting up. We also host marriage support and Resilient Relationship workshops. Another focus of the group is emergency preparedness planning in the family. I am a firefighter, so I know the importance of planning and informing the fire department of what will be needed before an event occurs.

The Arc recently launched the Center for Future Planning. What role do you see Dads 4 Special Kids playing as you plan for Zachary’s future?

My son Tyler has agreed to be a co-guardian of Zachary’s when my wife and I can no longer provide support. Tyler doesn’t know the ins and outs of the disability system. I want Dads 4 Special Kids (D4SK) to come alongside Tyler and help him support Zachary. D4SK aims to be an organization that will come along side dads who have children with special needs and walk with them through each stage of life. Our hope is that our experiences as fathers will better prepare new fathers who are beginning the journey.

Do you have any final thoughts for dads on Father’s Day?

I’ll be honest – having a child with a disability is challenging for a family. I want to provide fathers with the encouragement and support they need to address these challenges. We want to help these men step up to the plate and be prepared to navigate those up and down moments. We want those fathers to know they are not alone and that this journey will be unique and rewarding.

 

We thank Ray for sharing his story with us, and we wish him a very happy Father’s Day. For more information on Dads 4 Special Kids: www.d4sk.org. For more information on The Arc’s Center for Future Planning: http://futureplanning.thearc.org.

My Sister was Bullied by a Radio DJ

Update: Since this blog post was written, the DJ made an on-air apology and announced that his station will be working with local developmental disabilities organizations on an awareness campaign.

By Alex Standiford, Guest Blogger

Hello, my name is Alex, and I have an older sister, named Kellie.  Kellie is 30 years old, and can easily be described as the most loving, caring, and wonderful person I have ever met.  She sees the world very differently than most of us– without cynicism and with complete and utter hope.  To Kellie, each and every person is good, unless proven otherwise.  Anyone who visits her, no matter how frequently, is always greeted with a “Hi!,” an endless, gut wrenching hug, and a sincere declaration of love.  My sister is truly a beautiful person in both body and spirit whose outlook on life I can only hope to someday attain.  In many ways, I look up to her.  My sister passionately loves music and dancing and growing up I remember countless times that I would open her bedroom door to find her dancing and singing at the top of her lungs in front of the mirror.

You may wonder what makes Kellie so special, what makes her story different from any other big sister you or someone you know may have? Well, Kellie happens to have Down syndrome. If you know anything about Down syndrome you know that it is something that unique people, like my sister Kellie, are born with and will live with for their entire lives. Kellie, despite some hardships and challenges she has faced, has always persevered and been positive, friendly, and happy just being who she is.

On Monday, January 21st, my sister was faced with yet another instance of feeling like she was different, or that the fact that she had Down syndrome made her somehow less than other people. On the 21st she accidentally phoned in to Mo’s Radio Show on the Q92 Radio Station based out of Alliance, Ohio, where her manner of speaking was rudely scrutinized and unapologetically berated by both Mo and countless individuals who were “tuned in” at the time.  Mo opportunistically exploited my sister’s imperfect speech through his radio show and made her an object of amusement for all of his listeners– including people that knew Kellie.

“No, say it real slowly. I want to try to figure this out. It’s a little game.”

Anyone would have been embarrassed to be both accidentally aired on the radio and ridiculed for something which one has no control over. What Mo and countless listeners did not consider is what this experience felt like for Kellie. Kellie is self-conscious about her Down syndrome and has expressed her insecurity throughout her life.  Sometimes, she will ask, “Why do I look different?,”  and other times, “Why do I talk funny?”  When it comes with dealing with tough social situations, such as speaking with an unknown person when she accidentally dials the wrong number, she will fumble over her words out of general embarrassment that all people feel in such instances.  Most of the time, people will understand, at least to some small degree, and will deal with the situation with as much compassion and tact as possible.

When it comes to dealing with difficult emotional situations, Kellie processes her feelings very outwardly.  Everyone has an emotional range, and Kellie has the capacity to become so hurt that she will cry for days.  Being the epitome of an optimist Kellie trusts and assumes that everyone is trustworthy and kind.  When someone breaks that trust, it hurts her in a way that is far deeper and more powerful than I could ever understand.  I imagine it feels like the most intense betrayal or the greatest heart break I could ever experience. It is earth-shattering.

Knowing this, now considering the reality of what happened that January afternoon, try to understand the emotional pain, heartbreak, and confusion that my sister had to feel for the sake of public entertainment.  Undoubtedly Mo and the radio studio will continue to hold on to the argument that “the ‘host’ wouldn’t have aired the call had he known the situation in advance,“ that Mo “would NEVER do this with any sense of malice,” but what other sense could there have been in this situation? Mo himself stated, “You don’t know who Mo is? Okay, so I can laugh at you and you won’t know who to call and say you‘re offended. (laughs) Very good.” It was quite clear that Mo knew what he was saying and doing was offensive and inappropriate, but that did not stop him.

“You don’t know who Mo is?”

“No.”

“Okay, so I can laugh at you and you won’t know who to call and say you‘re offended. (laughs) Very good.”

Whether or not the call was made from an individual with Down Syndrome, an individual with a speech impediment, or some foolish prankster looking for attention, the direction and focus of the aired conversations were centered on something that is hurtful and demeaning to numerous people. Essentially, it was entirely ignorant to air the call into live radio at all. The situation would have never escalated had the “host” simply said to Kellie, “I’m sorry, I can’t understand what you’re saying,” or “This is Q92, I think you have the wrong number.” Whether intentional or not, this experience was real and it caused a great deal of hurt to many people, not the least of all to Kellie and it should have never turned out this way.

Luckily for Kellie, she has a strong, supportive family to help her through this time. What I don’t want to see happen is Mo or another jockey like him believe it is appropriate when “somebody calls my show with a little speech impediment– I have a little fun.” The next child or adult to become the focus of this cruel bullying may not be as lucky as Kellie. It could easily be someone who is defenseless to the act, someone who has no one to stand up for them—a child aired mistakenly on the radio who becomes an object of mockery and bullying at school or an adult with a developmental disability who lives alone in a group home. It is never appropriate to make someone who is different from you a bull’s eye on the target of your “humor”. We try to teach our children tolerance and love, but then what hope can we have for them to adopt this mentality when they can hear and see the adults around them blatantly ignoring the lessons they teach.

View the complete radio transcript or view Kelie’s Story on Facebook.