Consult with Our Seasoned Settlement Planning Attorneys

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What We Do

When a person suffers an injury, there are numerous issues to investigate. Some of these issues may affect the injured person for life. However, we help injured and disabled people and their families understand their options and prepare for the rest of their lives. When an injured party files a lawsuit, one assumption is that the receipt of funds is the end of the battle.

Unfortunately, many people learn only after it is too late that planning should have been initiated long before a settlement or verdict is reached. That’s where we come in. We work with families and attorneys who are already in the process of resolving an injury claim to avoid making mistakes when money is received and designing a plan to maximize the efforts of the parties involved in litigation so that the injured party can enhance any recovery to its fullest extent.

Plaintiffs and families: It’s all about you. You have suffered an injury that will change your life. You may be compensated for your injuries. You have one shot at getting this right and you are at the “goal line” when you are about to receive your recovery. Now is the time you need to consult with knowledgeable settlement planning attorneys.

You will hopefully only go through an experience like this once in your life. However, we have assisted families many times so that we can use our experience to provide you with the best possible outcome in your case and enhance the life of a person who may never be able to work again and who may need regular assistance with even simple daily tasks. We want you to be aware of all of your options before you decide how to settle your case. We are available for a free evaluation of your situation to determine your options​

Keeping Your Benefits

Supplemental Security Income and Medicaid play a key role in providing life sustaining benefits to many people in this country, particularly the disabled. There are very strict asset and income guidelines to maintain eligibility for these programs. Many injured plaintiffs would lose these important benefits without advance planning. This is a three-fold problem: First, the disabled person loses the important services and financial assistance provided by these programs upon receiving too much money (either through a structure or lump sum payment). This is extremely disruptive as trusted caregivers may be lost who are only available through these programs.

Second, once the person is again eligible for SSI/Medicaid, she needs to re-apply for these benefits, which can be a difficult and time consuming task dealing with the Social Security Administration and Department of Public Welfare/Human Services. Third, if the disabled person unfortunately spends down his settlement to pay for the services that would have been covered by government benefits and then re-applies for benefits, he is no better off financially after having gone through the difficult journey of a personal injury lawsuit, which can take several years to settle.

Our goal is to reduce or eliminate your exposure to this “triple threat”

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Settlement Options & Planning for Mediation

Almost all cases avoid trial and settle during a day long process known as mediation which is held typically at an attorney’s office where both sides to the lawsuit appear and attempt to resolve the case without going to trial. This is where life changing decisions are made and if you are not ready for mediation, you could end up regretting the outcome. If you want to know more about the settlement and mediation process, click here to listen to our Podcast on this subject.

If you would like a free copy of our Pre-Mediation Checklist to help you get prepared, click here.

Structured Settlement vs. Lump Sum Payment:

When deciding how to receive a settlement, it extremely important for the plaintiff to understand multiple issues that will be affected by choosing a short or long term payout, or a combination of payouts. There are tax considerations, asset protection planning issues and the ever present concern for current or future eligibility for important government benefits such as Medicaid or SSI. Unfortunately, without proper planning, a plaintiff may “lock” themselves into one option for an extended period of time without the ability to change their minds in the future or determine what options are available until it’s too late. We explain the options before a plaintiff decides how much, if any, of the recovery to structure after carefully examining all relevant factor

Assisting the Elderly Client

Many attorneys mistakenly believe that if a plaintiff receives a settlement over the age of 64 that there are no options to protect those funds.

This is in part because self-settled Special Needs Trusts cannot be funded by people who are 65 years or older. However, there are still many options available to the older client. We have represented numerous clients over 64 and provided unique and valuable planning techniques to preserve their settlements. In addition, an elderly plaintiff who may not be severely disabled must consider the future possibility of needing expensive nursing home care. The planning for this type of care is extremely time sensitive and should be investigated as soon as an older plaintiff knows that a financial recovery is on the horizon.

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Why Do I need a Trust?

When a person settles a personal injury lawsuit, it’s usually the largest sum of money they will ever get at one time. Because the courts want to protect an injured person from squandering their funds or from the designs of manipulating third parties, some type of protective trust is usually involved.

Here are some important things to consider when going through this process:

 

  • If the injured person is incapacitated and cannot make decisions, a court will almost always require a trust be established.
  • If the injured person is a minor, a trust usually will be required. Just because you are a parent of an injured child, don’t assume you will be allowed to act as trustee, especially if a large sum of money is involved.
  • A Trust can come in many forms, with many options. It’s important to become educated on the types of trusts that are available and how they work far in advance of mediation or settling a case, because frequently the terms of the settlement can lock in the trust term unknowingly to the injured person.
  • There are many different types of trustees all over the country and you should interview several far in advance of receiving your money to find out the trustee’s views on managing your money.
      Here are some examples:
      1. Does the trustee specialize in working with individuals with long term disabilities?
      2. Will the trustee allow the purchase of a home? A car? Can the family use the home and car? Vacations?
      3. What is the history of the trust company? It’s financial strength?
      4. Will the trust company let you select your own financial advisor to invest your money?
      5. What are the trustee’s fees? The financial planner’s fees?
      6. Do they have a quick response time for requests or is there a certain threshold that requires a committee to approve an expenditure?
      7. Will the trustee pay for medical procedures outside the United States?
      8. Will the trustee pay for medical procedures that are not FDA approved?
      9. How easy or difficult is it for the trustee to be removed by the injured person or his surrogate? What does the family have to say about how the trust is administered?
      10. Does the trustee use a law firm and what are the fees charged by the law firm against the trust fund?
      11. What type of support staff or resources does the trustee employ to handle daily care and medical needs? Do they have a hotline to call for quick answers?
      12. Is the trustee dynamic in the planning alternatives for the injured person or do they stick to boilerplate trust documents that are inflexible and not customized for the injured person and his family’s personal situation?
  • Hiring a trustee to oversee a large financial settlement is an important decision that should not be done at the last minute. Injured people and their families should be prepared to select a trustee and build an estate plan around the trust prior to settling the case or even attending mediation.
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Special needs trusts

A Special Needs Trust can be an invaluable tool for a disabled person to “own” assets which would normally exceed the low limits required by Medicaid and SSI programs, without losing the benefits of these important programs. A Special Needs Trust can be drafted in various ways but requires the following:

  1. The Trust must be established by the court, parent, grandparent or guardian of the disabled person for his or her sole benefit;
  2. The Trust must be funded prior to the disabled person’s 65th birthday;
  3. There must be a “payback” provision to reimburse any State who provided care through its Medicaid program upon termination of the Trust.

When assisting plaintiffs desiring to use a Special Needs Trust, we interview the client as well as any other relevant people (such as family, caregivers, professionals, etc.) and determine the goals and draft the Trust along with any supporting documentation. We also assist the client with understanding choices regarding what assets to place in the trust as well as how the trust will work on a daily basis.

We interface with all relevant government organizations to have the trust approved, and will attend court hearings on the client’s behalf to finalize everything in order to get the trust up and running. Our assistance does not stop there, as we are available for continued support as needed as things arise in the future.

Protecting Your Home

One of the most common requests we receive from clients and their families when they are accepting a monetary settlement is, “Can we buy a home?” While in the majority of cases, the answer is “Yes”, the means by which a home can be purchased or built can vary greatly - with equally great variations in how the home can be titled, used, and ultimately passed on to family members.

There are numerous factors to be considered when purchasing or building a home using monies received from a settlement. Here are just a few: The age of the injured person - if the plaintiff is a minor, the court will oversee the entire process. If a Trust is involved, then a Trustee will also be involved to oversee the process. Usually the family of the minor plaintiff wants to live in the home with the minor plaintiff. How will that work and who pays for their share of ongoing costs to maintain and improve the home? If a Special Needs Trust is utilized, then most states have a payback provision to the State for all Medicaid expenditures paid out on behalf of the injured trust beneficiary, so how can the family avoid having the home sold out from under them if the injured person dies? What if the family contributes significant money to the upkeep of the home? Will they get credit for that?

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If the injured person is not a minor, does this person have legal capacity to make decisions about purchasing a home? Should the person take title to the home in his or her own individual name? If a Special Needs Trust is funded immediately following settlement, has the opportunity to avoid the State lien against the home been lost forever? There are ways to take title to the home to avoid the State lien but these techniques must be implemented before the Special Needs Trust is funded after settlement.

Purchasing a home, especially one that may require significant and expensive modifications to accommodate a disabled client, is an extremely important decision that should be investigated far in advance of accepting a monetary settlement. Planning ahead allows the injured person and his or her family the ability to investigate the options and understand how to best design the ownership, use and ultimate disposition of the home in the future.

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Tax Planning

Anytime there is a significant windfall of money, there are tax issues to follow. Unfortunately, as plaintiffs approach a settlement, there is usually very little discussion about tax planning beyond whether or not the actual receipt of settlement funds is taxable. This initial analysis is only the first level of tax analysis to properly plan for the injured person’s well being in the future. Many plaintiffs are informed by their counsel that payments for “pain and suffering” are not taxable to the plaintiff. So, the funds which a plaintiff receives will not be included on the injured person’s income tax return. This is good news for plaintiffs. However, what happens to the plaintiff in the future once she or he has the money?

Generally, the plaintiff needs to set up a comprehensive estate plan. The greater the settlement value and the more complex the plaintiff’s needs, the more important it is to do tax planning at both the State and Federal levels. This can include not only future income tax planning, but also Federal Estate and Gift Tax planning, Inheritance tax planning and other tax issues.

The goal is to plan to minimize tax exposure at all levels for the future and reduce or eliminate tax “surprises” to the plaintiff or family. These decisions need to be investigated in advance, before the plaintiff accepts his or her money.