Learn more about Settlement Trusts

A trust can provide you with some of the same advantages as other settlement planning devices without the flexibility concerns or liquidity issues. A trust is a legal document that instructs a money manager, selected by the client, how to manage the money and how to make disbursements.

The money manager typically is a trust company who will charge a yearly fee for managing the trust. The fee typically ranges from 1% to 2% percent of the assets they are managing. The interest that the trust company earns for you through investing and managing your money should more than offset the fee in most cases. The interest earned from a trust is taxable. If you receive public benefits such as Medicaid or SSI, it may be necessary to create a trust to keep you eligible for those benefits. The law provides for a unique kind of trust called a Special Needs Trust which can be established for the disabled, preserving eligibility for public benefits. In addition, if you receive Medicare benefits a Medicare Set Aside trust may need to be established to keep you eligible for Medicare.

Trusts are flexible because the trust document allows the trust company power to adjust to changes in your life. You may find it desirable to have a trust established that is used in conjunction with other settlement related financial products.