WORKING WITH A TEAM TO MAXIMIZE THE BENEFIT OF A PERSONAL INJURY RECOVERY

by Thomas D. Begley, Jr., Esquire, CELA

            Wrapping up a Personal Injury case often involves assembling a team with individual areas of expertise to assist the Personal Injury attorney with in ensuring that the plaintiff’s settlement or award is utilized wisely and effectively.  The team is usually assembled by the Personal Injury Attorney.  The team members might consist of the Personal Injury Attorney, Trusts and Estates Attorney, a Financial Advisor, a Structured Settlement Broker, a Trustee, a Social Worker, a Care Manager, a Lien Resolution Expert, and a Qualified Settlement Fund (QSF) Administrator.  What are the roles of each of these team members?

• Personal Injury Attorney. The Personal Injury Attorney is the captain of the team.  The Personal Injury Attorney has the most important role, which is to resolve the case.  The Personal Injury Attorney has exercised his or her skills to achieve a favorable settlement or award, and that expertise should be recognized and appreciated.  Most good Personal Injury Attorneys will then withdraw to a supervisory position and let the rest of the team do the work that needs to be done utilizing their expertise in their individual areas.
• Trusts and Estates Attorney. The Trusts and Estates Attorney is usually tasked with the following responsibilities:
  • The availability of public benefits or the lack thereof.
  • Income tax analysis of the litigation proceeds.
  • Assistance of allocation between Survival Claim and Wrongful Death Claim.
  • The drafting of any Trusts that may be required.
  • Conducting counseling session with client and/or family to identify immediate needs and develop a budget.
  • Determining whether a Special Needs Trust is required or what other options may be available.
  • Estate Planning for plaintiff and/or plaintiff’s family members.
  • The impact of intestacy on the settlement.
  • QSF issues.
  • Referral to Trusts and Estates Attorney in other states.
  • Identification of appropriate Trustee.
• Financial Advisor. In cases involving significant recoveries, the services of a Financial Advisor are often advisable.  Tasks that the Financial Advisor might perform include the following:
  • An analysis of the Life Care Plan to determine the plaintiff’s ongoing needs.
  • Development of an overall strategy to help achieve client’s goals.
  • Determination of how much to structure and how much to lump sum.
  • Determine availability of private medical insurance coverage.
• Structured Settlement Broker.
  • Determining how to design a Structured Settlement to achieve the client’s financial goals.
  • Determining at what age a Structured Settlement should pay the plaintiff.
  • Determining when POPS would be appropriate to pay for such things as college education.
  • Determining whether or not cost of living increases should be included in the Structured Settlement payments.
• In many instances clients may wish to consider a professional Trustee as opposed to a family member Trustee.  The primary advantage to a professional Trustee is that they understand the law and keep up with changes in the law.  They can also prevent family friction and avoid conflicts of interest.  Family members can serve as Trust Protectors and remove and replace the professional Trustee.  Responsibilities of a Trustee include:
  • Supervision of investment management.
  • Develop a plan of distribution to ensure that funds are not squandered and that they last as long as possible, ideally the lifetime to of the trust beneficiary.
  • Work with in-house personnel or outside Social Workers to ensure that the client is visited and changes in circumstances are noted and adjustments made to distributions and support services as required.
• Social Worker. A Social Worker, either in-house with the Trustee or employed by the Trustee, is often utilized to visit the Personal Injury Plaintiff to ensure that the Care Plan is still workable and make adjustments where necessary.  A Social Worker might also advocate for the Personal Injury victim in obtaining housing or other benefits including but not limited to appropriate Social Security benefits, medical benefits, and SNAP (Food Stamps).  The Social Worker might also serve as the plaintiff’s Representative Payee.
• Care Manager. The Care Manager can be retained to supervise the plaintiff’s medical condition.  In some instances, it may be necessary for the Care Manager to visit the Plaintiff on a regular basis and make adjustments to the Care Plan as necessary.  In some instances, it is necessary for a Care Manager to retain the services of Home Health Aides or other Medical Assistants to assist with the day-to-day or other periodic care of the Personal Injury Plaintiff.
• Lien Resolution Expert. There are numerous potential liens that may need to be resolved by the Lien Resolution Expert.  These include but are not limited to the following:
  • Medicaid – this is especially important where there is a possibility of an Ahlborn
  • Medicare
  • Medicare Advantage/Medicare Part D
  • ERISA
  • State Worker’s Compensation
  • Federal Employee Compensation Act
  • Hospital Liens
  • Private Medical Liens
  • Veterans Administration Liens
  • Federal Employee Health Benefit Liens
  • S. Medical Care Recovery Act Liens
  • Welfare Liens
  • Division of Mental Health Liens
  • Charity Care Liens
  • Crime Victims Compensation Act Liens
  • Child Support
• QSF Administrator. In cases involving multiple Plaintiffs, it is often useful to establish a QSF.  A QSF is usually established prior to trial.  The parties agree on a global settlement.  The Defendant pays that amount into the QSF and the Plaintiffs can then take their time in allocating the settlement among themselves and in dealing with various liens and other issues.  The Defendant gets the advantage of the immediate tax deduction.  Responsibilities of the QSF Administrator include by are not limited to the following:
  • Determination as to whether a claim is permitted under federal law.
  • Determination as to whether individual claims submitted by Claimants and Vendors are appropriate.
  • Analysis of income tax issues.
  • Obtaining the Court approval of the QSF documentation.
  • Filing appropriate income tax returns.
  • Preparing Form W2, W3, 941s, and 1099 where appropriate in making estimated tax payments as required.
  • Obtaining necessary Court approval for distributions.
  • Filing appropriate accountings as required by the Court.