Facts About Fundraising For Medical Bills
Starting a fundraiser for someone that has been injured is a great thing, but did you know that it could have a negative impact on that person? Financial planner, Jason Lazarus, explains how hosting a fundraiser can actually cause problems for the person it was intended to help.
Step 1: Fundraising
Frequently when somebody's catastrophically injured, whether it's a brain injury or a spinal cord injury, the community will go out and do fundraising for that injury victim. However, that can create a dangerous situation and there's three things that you need to know.
Step 2: Lose Medicaid Cover
One is that money that's sitting in a bank account that's been raised by the community, if that person is receiving public assistance such as SSI and Medicaid, that is a countable resource and they can lose their Medicaid coverage.
Step 3: Special Needs Trust
Two, you should know that a special type of trust, called a Third Party Special Needs trust, can be established and the money that's been raised by the community can be put into that trust.
Step 4: Supplementary Care
The third thing that you need to know, is that the trust can then be used to pay for the supplemental care, and supplemental needs just like a regular special needs trust can be used to pay for that person's care so it can really help an injury victim but it's got to be done the right way otherwise you run the risk of that person losing their Medicaid coverage.
Step 5: Consult A Financial Advisor
My advice would be if you're going to go out and do a fundraiser is to consult with a financial advisor who is experienced in dealing with Medicaid and SSI preservation and a lawyer who's skilled at drafting trusts that protect public benefit eligibility, create that third party special needs trust and have the funds flow into that when they're raised so that the person doesn't have, the injury victim doesn't have an issue with their future Medicaid or SSI benefits.
