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Alex* fell from a balcony and suffered a traumatic brain injury. As a result of his injury, he began to deal with severe anxiety and depression. He received a settlement, and the Milestone team stepped in to identify the best plan for him moving forward. The team established a trust that pays for all his medical needs with a Medicare set-aside, so he can still get government benefits. They arranged for the trust to provide a monthly prepaid debit card to help him manage his money. The trust also pays for one of the best rehabilitation facilities in the country.

setting up a trust with an MSA

Alex is getting the most from his settlement, and his parents have the peace of mind that he has the right financial, emotional, psychological, and physical care now and in the future.

Protecting Benefits with a Trust and a Medicare Set-aside

As in Alex’s example above, a trust can allow a person to put aside some of his or her settlement to pay for certain items without compromising eligibility for government benefits. This settlement planning tool can be highly effective for an injured plaintiff.

Some trust options include (but are not limited to):

A trust can help with spending management while satisfying the issue of suddenly having too much income after settlement to qualify for benefits. However, Medicare beneficiaries could face an additional problem with eligibility.

According to the Medicare Secondary Payer rule, certain insurance coverage is responsible first for paying for medical expenses related to an injury or illness for which a person has received a settlement. If that payment does not cover the full cost of services, Medicare may become the “secondary payer” responsible for the balance of payment. If a person receives a settlement and fails to adequately consider Medicare as a secondary payer, he or she could face denial of coverage for future medical expenses.

For many people in this predicament, a Medicare set-aside (MSA) is a good solution. An MSA is an amount of money that’s put aside to fund future care without relying solely on Medicare. Simply put, an MSA is a voluntary arrangement that indicates to the Centers for Medicare Services that a beneficiary is not trying to extract undue funds from the Medicare system.

Together, these settlement planning tools helped secure Alex’s financial future after his accident. We are proud to help each of our clients come up with customized planning solutions that fit their individual needs. If you or a family member is approaching settlement in an injury case, feel free to call Milestone Consulting with any questions about future planning.


*For confidentiality purposes, we removed our client’s real name from this narrative.

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