A construction worker from Queens falls from a scaffold, and after a long legal fight, he is awarded a significant settlement. For his family, the relief is immense. The financial pressure is gone. But in my experience, a new, more complex challenge is just beginning. The settlement isn’t just a check to be cashed—it’s a lifetime of medical care and financial support that now requires deliberate stewardship.
The transition from winning a case to stewarding the award is where many families falter. The skills that help you through litigation are not the same ones required to manage a multi-generational asset. Suddenly, you are responsible for a fund that must last for decades, and you face risks from creditors, predators, and even well-meaning but ill-informed relatives. The award is a beginning, not an end.
The Settlement as a Generational Asset
We encourage clients to view a settlement not as a windfall, but as the creation of a new family legacy. It must be structured to provide for the injured person’s needs, first and foremost, but also with an eye toward prudent, long-term growth and protection. This requires a shift in mindset. You are no longer a plaintiff; you are the custodian of your family’s future.
The primary risk we see is disqualification from essential government benefits. If the injured person receives or expects to receive needs-based assistance like Medicaid or Supplemental Security Income (SSI), a lump-sum settlement will almost certainly render them ineligible. These programs have strict asset and income limits. Receiving a large check can force a family to spend down the entire award on medical care that would have otherwise been covered, defeating the very purpose of the settlement.
This is not a theoretical problem. It is a predictable outcome that can be avoided with intentional planning.
Using Trusts for Stewardship and Protection
For most families in this situation, the trust is the most critical tool for managing settlement proceeds. A properly structured trust holds the funds for the benefit of the injured person without having them count as a personal asset for government benefit eligibility. It creates a formal, legal structure for managing the money and insulates it from outside claims.
In New York, the key instrument for this is the Supplemental Needs Trust, or SNT. Governed by EPTL § 7-1.12, an SNT is an irrevocable trust established for a person with a severe and chronic or persistent disability. The funds in the SNT are not used for basic food and shelter, which are covered by benefits. Instead, the trustee can use the funds to pay for a wide range of other expenses that improve the beneficiary’s quality of life—things like physical therapy, home modifications, transportation, education, and recreation.
The trustee has a fiduciary duty—a legal obligation—to act in the best interest of the beneficiary. This is a profound responsibility. The trustee manages investments, pays bills, keeps meticulous records, and ensures every disbursement complies with the law. Choosing the right trustee—whether a family member, a professional, or a corporate trust company—is one of the most important decisions a family will make.
Beyond the SNT
While the SNT is vital for those on public benefits, other trusts can serve different purposes. A simple revocable living trust might be appropriate for someone who is not receiving needs-based aid but still wants a formal structure for asset management, especially in cases of diminished capacity. The goal is the same: to create a durable, legally sound framework for stewardship.
The structure we design depends entirely on the family’s circumstances—the size of the award, the age and medical needs of the beneficiary, and their long-term goals. The one constant is that doing nothing is the worst possible option.
A personal injury settlement represents a hard-won victory. It’s a recognition of a profound loss and a resource to make the future manageable. The legal work that goes into securing that award is only the first step. The work of protecting it for a lifetime—and perhaps for the next generation—requires a different kind of advocate and a different kind of plan.
If your family is expecting a settlement, the first conversation must be about how the funds will interact with your existing financial and medical plan. Our work begins by mapping out a trust structure that aligns with your specific, long-term needs.
