Settlement Beneficiaries

Settlement Beneficiaries: FAQ


With Capital First Trust Company, you do not have to navigate your settlement trust alone. We are here to support you and answer your questions. Give us a call. In the meantime, here are some of the most frequently asked questions from our settlement trust beneficiaries and their loved ones.

Capital First acts as the corporate trustee that administers the trust. Capital First is responsible for investing funds, making distributions, and managing court accountings. We understand government programs, changing laws, and other technical requirements involved in correctly administering a trust. At the same time, we are dedicated to understanding the beneficiary’s unique needs so that the trust can make the best possible contribution to the individual’s quality of life.
Capital First Trust Company’s unique Settlement Preservation Trust™ (SPT) is designed to protect the settlement proceeds from wasteful dissipation while at the same time helping to make funds available in the amounts and at the times the beneficiary needs them the most. The SPT is designed to provide the trust beneficiary with payments pursuant to language contained in their trust document while offering them financial flexibility and controlled liquidity. The SPT’s most important feature is its ability to adapt and accommodate an important change in one’s future financial needs.

Most personal injury claimants will experience unexpected changes in their future financial condition. When this occurs, financial flexibility and controlled liquidity are in the claimant’s best interest. For these reasons, the SPT is the preferred way to protect the claimant’s settlement proceeds.
A Special Needs Trust (SNT) is a trust that preserves the beneficiary’s eligibly for needs-based government benefits such as Medicaid and Supplemental Security Income (SSI). Assets held by the trust are not “countable” for the purpose of these benefit programs. There are strict rules regarding disbursements of SNT funds. As a general rule, the trustee will supplement the beneficiary’s government benefits, but will not replace them.
Capital First manages trust assets to support the financial needs of the beneficiary. The investment objectives are to provide downside protection, control principal fluctuation, and generate returns that allow for long-term growth. Capital First controls investment risk through portfolio diversification and fixed income allocation. Capital First’s team of investment professionals monitor the investment portfolio on a regular basis and meet quarterly to review performance.
Each beneficiary is assigned a Trust Officer who serves as their primary contact at Capital First. The Trust Officer is familiar with needs of the beneficiary and the terms of the trust document. Any distribution requests and questions are reviewed by the Trust Officer. Our Trust Officers come from all walks of life and are dedicated to providing excellent customer service to the beneficiary. The Trust Officer can only make decision according to the terms of the trust document.
The distribution process can take anywhere from 1 to 10 business days depending on the circumstances. First, the beneficiary or authorized representative submits a signed request to the Trust Officer. The Trust Officer will review your trust document to determine if the distribution can be made. The Trust Officer will contact the person requesting funds whether or not the distribution has been approved or denied. Once approved, necessary investments may need to be liquidated to make cash available. Unless otherwise instructed, the Trust Officer will send a check, via US Mail, to the address we have on record. Checks typically take 2-5 days to receive. Federal Express next-day delivery and wire transfer options are available for a fee.
As your corporate trustee it is our duty to properly administer your trust. Part of our responsibility is to make sure that funds are dispersed responsibly and per the trust document. Only the beneficiary or authorized user can request funds. Your dedicated Trust Officer is here to listen to your concerns and make sure that trust funds stay in the right hands. If the situation arises, it is our job say “no” to a family member or friend so you don’t have to.
In most cases, a trust can purchase a vehicle. Providing safe and reliable transportation plays a key role in supporting a beneficiary’s quality of life. We are aware of Social Security and Medicaid resource guidelines for the ownership of a vehicle. The Trust Officer assists in the process of shopping for and purchasing a vehicle by discussing what key features the vehicle needs to have, budgetary concerns, and ownership specifics.
It is not uncommon for a trust to purchase a home. Your dedicated Trust Officer will work with you to determine if purchasing a home is appropriate for you and the trust. If the trust is able to purchase a home, Capital First will support you in completing a needs analysis, define budgetary concerns, and discuss ownership considerations.
Yes. Upon request, we provide online access via computer or mobile to view the trust account via our secure online system.
Trust assets are protected by law and cannot be used to pay Capital First's creditors nor be commingled with the company's assets. Furthermore, Capital First is a regulated trust company subject to rigorous banking laws and regularly audited by the banking examiners. Capital First carries additional E&O insurance and bonding to offer additional protection to clients.
Trust fees will vary depending on the type of trust used. Please call us for a current fee schedule: 800-521-2359
It is possible. A trust document can be drafted to allow for provisions to remove a trustee.
The IRS defines a grantor trust as any trust “over which the grantor or other owner retains the power to control or direct the trust’s income or assets.” This means that in accordance with IRS rules, the taxable income from the trust is passed through to the beneficiary and is taxed at the beneficiary’s tax bracket. The beneficiary is taxed on earnings of the trust, like a savings account, not on the distributions. At the end of each year, the beneficiary will receive a year end statement along with a Grantor Letter. The information listed on the Grantor Letter gets reported on the beneficiary’s Form 1040. Any taxes that may be owed, can be paid from the trust.

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