Our Settlement Planning Attorneys are Part of Your Team

Personal Injury Lawyers

You’ve worked hard to reach a recovery for your client. We want to help you enhance the results and the future life of your client, while also guiding you to avoid mistakes and liability to “cover all the bases” when reaching a settlement or verdict. It’s never appropriate to simply “give the client their money” and go on with their lives, nor is it acceptable to structure every case. Such abbreviated investigation of your client’s situation could lead to liability for you as well as your client. Here are just some things to consider:

  1. Does your client or a family member in her household receive any government based benefits (i.e. Medicaid, SSI, etc?)
  2. Is it likely that your client may need long term care services (i.e. home care, nursing facility care, etc.) in the future? If so, what steps have you taken to protect the proceeds of litigation?
  3. Are there outstanding liens that are unresolved in the case?
  4. Have you “considered” Medicare’s interests and is a Medicare Set Aside required in a liability case?
  5. Now that your client is receiving money, does he even have a basic estate plan?
  6. Are there family or friends of your client who may exert influence over your client that would indicate a protective trust may be appropriate?
  7. Have you considered the multiple layers of tax planning for your client now (especially if considering using a structured settlement) as well as in the future?
  8. Are you concerned with “constructive receipt” of the settlement funds causing a problem for your client’s continued government benefits?

We get involved in the settlement process early so that we can assess the plaintiff’s needs and offer solutions before funds are received. This helps to expedite the settlement process because the client has a plan in place. In order to facilitate our examination of the client’s situation without risk to the client or counsel, we offer a complimentary review of the matter and can quickly identify the issues for you.

Structure Brokers: We can assist both plaintiff and defense structure brokers to help plan the transition of accepting a recovery smoothly. We can assist with the allocation of funds between structures and outright distributions, as well as distributions to Special Needs Trusts or various other types of trusts necessary to protect the client. Some states, like Pennsylvania, have new, very strict rules on how to make an immediate annuity “Medicaid compliant”. If you are not aware of the rules introduced in Pennsylvania in 2013, doing a structure “the old fashioned way” could lead to a loss of Medicaid and SSI benefits for the client as well as liability to the broker. Let us help you help your client understand the parameters of what type of structure is appropriate.

SNT Trustees: As a Trustee of a Special Needs Trust, you play a very important role in the management of a disabled person’s assets and the coordination of many issues that will affect the trust beneficiary during her lifetime. We assist Trustees to interpret the law and advocate for the rights of disabled beneficiaries to maintain their important government benefits. We frequently draft Special Needs Trusts and shepherd them through the approval process with Medicaid and SSI eligibility. This may involve interactions with the trust beneficiary and family, preparing court pleadings and making court appearances to maintain the integrity of the trust plan. We can even assist with establishing a court appointed guardian when necessary.

Defense Attorneys: We can be brought into a case to help “cover the bases” when dealing with things like Medicare Set Asides, ongoing and future Medicaid and SSI benefits to limit your liability so that when you “close” a case, it is really “closed”.

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Avoiding Malpractice by using a Settlement Planning Attorney

While Plaintiff Attorneys play a vital role in securing necessary funds to help compensate their clients who are victims of negligent injuries, there are important considerations that reach far beyond settling the case. Many of the decisions that are made before or at mediation can have long term effects on the injured client, his family and the potential future liability of the Plaintiff Attorney.

Consider just some of the issues facing the Plaintiff Attorney pending settlement that are not readily apparent when striking the deal with Defense Counsel:

  1. Has there been an in-depth analysis of the Life Care Plan to insert alternative coverage for medical and custodial care through future government benefits?
  2. Has there been an analysis of the injured person’s current and future government benefits eligibility generally?
  3. Are you aware of the impact of prematurely filing for Social Security Disability Income benefits which lead to Medicare coverage which can lead to a Liability Medicare Set Aside issue?
  4. Has there been an analysis of the different types of trusts that are available and the long term effects of such trusts? For example, has the client been fully apprised of the Medicaid payback provisions of a statutory Special Needs Trust? Has the client been advised of other types of trusts that will still provide protection, future Medicaid benefits without the payback provision to the State Medicaid Agency? Are you prepared to answer to your injured client or his family years later when a significant debt to the State Medicaid Agency has accrued because of the use of a statutory Special Needs Trust when other alternatives were available at the time of settlement?
  5. Does your trust document have a mechanism to remove a Trustee when things go bad? Has your client been apprised of options to prepare an estate plan that keeps the family in control so you don’t get that angry client back years later wondering why he can’t get any money from the trustee?
  6. Are you and your client aware of the timing of purchasing a home for the injured person and the various ways to protect the home from future claims by the State Medicaid Agency or to preserve the home for the spouse and children someday? This must be done prior to paying the funds out of your IOLTA fund to a trustee or third party.

Medicare set asides

The Medicare Secondary Payor Act has always required the determination of a “set aside” of some amount of funds related to paying for future care of an injured worker.

However, in the past few years, the Centers for Medicare and Medicaid Services (CMS), has issued information that indicates that now parties involved in a liability suit (i.e. personal injury, medical malpractice, etc.) must “consider” Medicare’s interests. While there are a variety of interpretations as to what is required at this time, it is important for all parties to a liability action to mitigate their risk for future Medicare denials of coverage for the plaintiff. 

We take a comprehensive review of the situation, review the care plan as well as consult with experts from around the country to determine the best ways to “consider” Medicare’s interests while reducing out of pocket future medical costs for the injured person. With the recent enactment of the Affordable Care Act, there are now options open to disabled people to obtain healthcare coverage that did not exist just a few years ago. 

Therefore, it is wise to determine how Medicare’s interests may affect your settlement before you choose a course of action. In addition, if an MSA is necessary, there are a variety of ways to fund the MSA account. We can assist the parties to the litigation on the optimal ways to fund the MSA, minimizing outlay of funds and limiting liability of the parties involved.

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qualified settlement funds(QSF'S)

You’ve worked very hard to reach a settlement. However, as you can see from the information on this website, there is a lot more to plan for than just receiving a check or a series of structured payments. Unfortunately, many parties involved in a personal injury lawsuit feel the pressure of various time constraints just as the case is about to close. This “crunch time” can cause adverse decisions to be made which could not only affect the plaintiff, but the lawyers on both sides and the defendant as well.

Wouldn’t it be helpful to able to reach settlement terms that all parties agree to in spirit, but then be able press the “pause” button to make sure all the little details are worked out so that everything gets done correctly the first time (and possibly only time you have a shot at this)? Well, that’s what a Qualified Settlement Fund (QSF) allows the parties to a pending lawsuit to accomplish without sacrificing the “deal” that has been struck.

Just in the past few years, the IRS has clarified the rules regarding QSF’s that allow all parties involved to maintain flexibility when settling a dispute. These rules can be found in section 468B of the Internal Revenue Code. Basically, the parties to the lawsuit will set up the QSF in advance of paying funds or signing settlement documents. We prepare the QSF as a Trust document that spells out how the settlement funds will be held and distributed in the future based upon the needs and goals of the parties involved. While many people believe that QSF’s were only meant for multi-party cases (i.e. class action suits), the IRS allows single plaintiffs to use this technique which can greatly enhance the overall outcome for the parties to the lawsuit as well as their respective legal counsel.

Consider the following issues that can remain unresolved as the case approaches settlement:

  • Medicaid/Medicare claims for past medicals
  • MSA – Medicare Set Aside analysis for future medical costs
  • The establishment of a Special Needs Trust to preserve Medicaid and SSI eligibility
  • Hospital liens
  • Time to establish a plan for a disabled plaintiff to maintain Medicaid and SSI when not choosing to use a Special Needs Trust.

Advantages of using a QSF for Defendants:

  1. When Defendant has paid into the QSF, economic performance has occurred and the Defendant can take the tax deduction.
  2. Shifts the burden onto an independent fiduciary to settle outstanding Medicare claims.
  3. Defendant can disengage from the litigation quickly once paid into QSF.
  4. Defendant does not have to wait on the resolution of allocation issues, liens or plaintiff delays in setting up a Special Needs Trust.

Advantages of using a QSF for Plaintiffs:

  1. Allows Plaintiffs to hit the “pause” button once a settlement is reached without losing the terms that have been negotiated.  In other words, time to handle setting up a Special Needs Trust (which usually requires both DHS and Court approval, especially when a minor or incapacitated plaintiff is involved).  Time to consider using a Medicare Set Aside and establishing the MSA fund.
  2. The QSF Administrator can assist with allocation or lien resolution.
  3. If there is a risk that the Defendant may soon become insolvent, the funds can be paid into the QSF immediately while all the details are worked out.  This gives the Plaintiffs great relief that they know the funds are available.
  4. Plaintiffs can direct the QSF Administrator to invest the settlement funds, earn interest, etc.
  5. Plaintiffs can still choose to establish a structured settlement and received qualified income tax treatment just as if the structure was established through the normal settlement process.

Advantages of using a QSF for Plaintiff Attorneys:

  1. Gives attorneys time to review the distribution options with their client and make recommendations in a more controlled environment with less pressure.
  2. Gives attorneys time to work with a Special Needs planning attorney to establish a Special Needs Trust or resolve outstanding liens.
  3. Plaintiff attorney can delay recognition of income by leaving the attorney’s fee earned in the case in the QSF for an indefinite period of time, while selecting the terms on which payout to the attorney from the QSF will occur.  This is especially powerful for plaintiff’s attorneys who may not want to pay income tax on the entire attorney fee in one calendar tax year.  Funds can still be invested as the attorney wishes in the QSF and income from those investments can be paid out to the attorney as drawn up in the QSF trust agreement.

In summary, the use of QSF’s in single plaintiff cases continues to increase across the nation and provides more options and control for all parties involved.  If you would like a free analysis of whether a QSF would be helpful to you, please contact us toll free at 888-402-5680.

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Class Actions

A Class Action lawsuit involves many similarly situated plaintiffs who have been injured by a common problem. Since these cases can involve hundreds or thousands of plaintiffs, rarely does a plaintiff have a “one on one” relationship with her attorney in the traditional sense. We represent individual plaintiffs of class action lawsuits to help them identify how receiving their settlement will affect their lives and options to plan for the future, including how to receive the funds. Plaintiffs in a class action are provided with significant amounts of documentation in order to settle their portion of the case, with much of the language in “legalese” that can be confusing. When you settle your portion of the claim, you will be asked to make choices that have important deadlines, which become set in stone once the case closes. We can explain the options and discuss them with you and the law firm(s) involved in handling the class action suit so that your portion will be designed to enhance your personal situation rather than just being a number in a large class action lawsuit.