What Florida Personal Injury Attorneys Need to Know Before Their Client's Settlement Check Arrives
If you practice personal injury law in Florida, you've probably had this moment: your client is finally getting their settlement or verdict, and somewhere in the back of your mind you remember that they're on Medicaid or SSI. You know you need to say something about it. But what, exactly?
Jason Neufeld, a board-certified elder law attorney at Elder Needs Law, made a video specifically for personal injury attorneys and their clients who are about to receive money from a personal injury or medical malpractice case while relying on needs-based government benefits. Here's what he wants you to know.
Medicaid Isn't One Program — It's a Dozen-Plus Programs
The first thing that trips people up is treating "Medicaid" like a single, uniform benefit. In Florida, it isn't. There are roughly a dozen different Medicaid programs, and each one has its own income and asset rules.
Some Florida Medicaid programs simply help cover health insurance and Medicare premiums. Others exist to help pay for long-term care, whether that's care received at home or in a facility. These are separate programs with separate eligibility standards — and some of them, generally called family-related Medicaid, don't have an asset test at all. They only look at income.
That distinction matters enormously when a client is about to receive a lump sum. The right approach for one Medicaid program might be completely unnecessary — or even harmful — for another.
Special Needs Trusts Are a Great Tool, But They're Not the Only Tool
Personal injury attorneys tend to lean hard on special needs trusts, and there's a good reason for that: they work, and they're well known. Jason drafts a lot of them himself and works with pooled special needs trust companies regularly. Depending on the case, a special needs trust may genuinely be the right choice.
But it's rarely the only choice, and it isn't always the best one for every dollar of a settlement. Other options that can protect a client's Medicaid or SSI eligibility include:
- ISM shelter contracts
- Personal services contracts
- Promissory notes
- Certain types of investments
These tools can improve a client's quality of life with settlement funds without pulling that money into Medicaid's reach.
The Estate Recovery Problem With Special Needs Trusts
Here's the part that often gets left out of the conversation: when settlement money goes into a first-party or pooled special needs trust and the client later passes away, whatever is left in that trust typically goes back to the state through Medicaid estate recovery. Depending on the size of the recovery, there are ways to reduce or avoid what has to be repaid — leaving more for the client's family. That's real value for a client, and it's worth exploring options before defaulting to a trust for the entire settlement.
Sometimes, Nothing Fancy Is Needed at All
Not every settlement calls for a special needs trust or any other Medicaid-planning tool. If a client is receiving a modest amount after attorney's fees — say, a few thousand dollars — and they can simply spend it down on legitimate expenses, that's often perfectly fine. Paying off credit card debt, catching up on a mortgage, or covering expenses they've been putting off are all reasonable uses of smaller settlement funds.
Planning tools like special needs trusts tend to come into play with larger sums — the kind of money where it makes sense to preserve some of it for the future rather than spend it all right away.
A Simple Rule of Thumb for Referring Out
If your client is on SSI, Medicaid, or a Medicaid waiver program and is about to receive a personal injury or medical malpractice settlement or verdict anywhere in Florida, it's worth a conversation with an elder law attorney before the funds are distributed. Elder Needs Law offers consultations throughout the state of Florida, and cases can be handled on a letter of protection so the client doesn't have to pay out of pocket until the case settles.
Want to Go Deeper?
Jason Neufeld is also the author of a book on protecting long-term care costs and benefits eligibility:
Medicaid: Some of Your Long-Term Care Expenses
For more on Florida Medicaid planning, special needs trusts, and elder law topics, visit:
If you found this helpful, share it with a colleague — the more Florida attorneys and families who know their options, the better the outcomes for clients.
