If you are in the middle of planning how your assets will be divided up to your family or others, an accident can cause even more stress. The last thing most people want to deal with is a personal injury lawsuit when they are focusing on estate planning. However, it’s important to take care of your lawsuit upfront and know how a personal injury settlement can affect your plans for your assets.
A big part of estate planning is deciding what to do with any money you have in the bank. If you’ve received a large settlement out of a personal injury claim, that means that number could substantially and quickly change. The federal government has declared a certain amount of funds received by a plaintiff from a lawsuit to be tax exempt, but state tax laws can be different in this area. When looking at your funds, it’s important to consult the laws of your state in order to get an exact figure for the amount you’ll have leftover.
Before jumping to leave the entire lump sum of a settlement to your kids, family, or friends, you should consider if you’ll need any portion of that money for the remainder of your life to cover medical expenses or disability necessities. If your personal injury settlement was coming from something like a car accident or slip and fall accident, you could have injuries you aren’t even aware of yet. Often, muscular injuries or other injuries that may require a chiropractor or medical professional can be latent. Even if you have a slight ache or pain, you may be dealing with so many other tasks that you don’t get that injury checked out right away or brush it off as being something that will heal on its own. Make sure you talk to a doctor and get a thorough examination before ruling out future medical expenses for yourself.
Once you figure out a strong estimate of the funds you need to allocate in your estate plan, you may also want to consider investing some funds into various plans. Depending on your age, there may be a substantial amount of time for the funds to accrue if placed in the right type of assets or accounts. A strong estate planner can help you take all these items into consideration. Likewise, a personal injury lawyer Washington D.C. residents recommend can aid you throughout the process of any lawsuits you are dealing with.
Thanks to Cohen & Cohen, P.C., for their thoughts on personal injury settlements and estate planning.