A settlement or award of damages in a personal injury case means the end of litigation. It’s the biggest step – but only the first step – in assuring your client’s financial future. Even after you’ve succeeded in reaching a great result, your professional obligations include making sure that the award is maximized, that the funds are safeguarded and that your client preserves eligibility for public benefits. Failure to properly advise your client could result in the award being quickly dissipated and may give rise to a malpractice claim in the future. Experienced settlement planners can consult with you and your clients on a range of issues, including:
Resolving Liens – Personal injury settlements and awards to minor or disabled plaintiffs are often subject to claims by Medicare, Medicaid (MassHealth) or private insurers. Understanding each type of claim and how it can be compromised is critical to maximizing your client’s award.
Ensuring Solid Management – Plaintiffs who receive an award may be vulnerable to pressure from “friends” or family members and may need help in managing the funds over the long term. What appears to be a large sum won’t go far if it is not well managed.
Preserving Public Benefits – The injury that gave rise to the claim may have resulted in permanent disability, meaning that your client will need to depend on the settlement funds for the rest of his or her life. In order to make sure that the award lasts for your client’s lifetime, you should be able to provide information about eligibility for public benefits such as Supplemental Security Income, Medicaid, and public housing.
The Annuity Solution – While the numbers provided by structured settlement brokers can look appealing, using an annuity may mean locking in historically low interest rates for a lifetime. Annuities should be considered only in the context of a long-term financial plan.
Considering Conservatorship and Guardianship – If your client has lost the capacity to make decisions, the family may need advice about seeking court approval to manage the plaintiff’s funds.
Structuring the settlement appropriately, negotiating the liens with Medicare, Medicaid and private insurers, and using a supplemental needs trusts can preserve eligibility for benefits and ensure solid financial management for the client’s lifetime. Depending on the client’s situation, there may be other issues to consider as well, including tax planning and obtaining court approval for the settlement. An experienced settlement planning firm will help you reach the best outcome for your clients.