Birth Injury Settlements: A Lifetime of Care for Your Child

When a child is injured at birth — cerebral palsy, brain damage, or another permanent condition — the family faces a lifetime of care needs. A settlement in these cases is often substantial, precisely because it has to account for decades of therapy, medical care, equipment, education support, and eventually adult care.

A settlement trust is essential here. It protects a large settlement from being mismanaged, structures it to last across the child's lifetime, and provides professional administration that can adapt as the child grows and needs change.

Children with significant disabilities often qualify for Medicaid and SSI, which have strict asset limits. A settlement paid directly to or for the child could jeopardize that eligibility. A properly structured special needs trust keeps the settlement from counting against those limits, so the child keeps their benefits while the trust funds everything benefits do not cover.

Because this is a first-party situation — the settlement belongs to the injured child — a first-party special needs trust is the usual tool, and it must be established before the beneficiary turns 65 (rarely a concern at birth, but part of the legal framework). Professional administration ensures distributions are handled so benefits are never accidentally lost.