How California Special Needs Individuals Can Protect Personal Injury Settlements
What You Need to Know About Court Approval and Government Benefit Eligibility
California has enacted several legal safeguards to protect individuals with special needs—especially when it comes to receiving and managing personal injury settlements. For special needs individuals, a settlement often brings financial relief but can also trigger unintended consequences if not properly managed.
At The Law Offices of Ali Taheripour, we are committed to helping clients with disabilities or special needs understand how to protect their financial future while maintaining access to essential government benefits.
Court Approval for Special Needs Settlements in California
Under California law, any personal injury settlement awarded to an individual with special needs must be approved by the court. This process involves filing a detailed and document-intensive petition, similar to what is required for the minor’s compromise process, which was the topic of a previous blog.
The court evaluates:
- The nature of the injury
- The fairness of the settlement amount
- The adequacy of future care planning
- Whether proper legal mechanisms (such as a trust) are in place to safeguard the funds
How a Settlement Could Impact Government Benefits
One of the biggest concerns for special needs individuals receiving a personal injury settlement in California is how the award may affect eligibility for government programs like Supplemental Security Income (SSI) and Medi-Cal.
These means-tested programs have strict asset limits. If a settlement pushes a person’s assets above $2,000, for example, they risk losing access to critical healthcare and income support services. Even a modest award can trigger disqualification—let alone a substantial settlement meant to cover long-term care needs following a catastrophic injury.
With rising healthcare costs in California, losing these benefits could rapidly erode a settlement intended to last a lifetime.
The Role of Special Needs Trusts (SNTs)
To avoid this, many families and individuals turn to Special Needs Trusts (SNTs). These trusts allow the injured party to benefit from their settlement funds without directly owning them, thus preserving eligibility for public assistance.
Types of Special Needs Trusts:
- First-Party SNT: Funded by the individual with special needs, often using proceeds from a personal injury settlement.
- Third-Party SNT: Funded by a parent, guardian, or other party (not the beneficiary).
A properly established SNT can be used for expenses not covered by public benefits, such as:
- Housing supplements
- Special therapies and treatments
- Assistive devices and transportation
- Personal care assistance
At the Law Offices of Ali Taheripour, we have experience handling personal injury cases involving car accidents, dog bites, pedestrian injuries, and slip and falls, and we work closely with families to address the unique needs of clients with disabilities.
Get Trusted Legal Help in California
If you or a loved one has a disability and is facing the legal complexities of a personal injury settlement, don’t navigate this process alone. Protecting government benefits and securing a sustainable financial plan requires experienced legal support.