MY CLIENT HAS RECEIVED A PERSONAL INJURY SETTLEMENT. HOW CAN A PERSONAL INJURY SETTLEMENT CONSULTANT HELP ME?

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

There are many factors that must be considered in settling a personal injury case that go beyond the life care plan.

• Hopes and Dreams. The person with disabilities and his or her family may have hopes and dreams beyond the Life Care Plan. Typically, these involve ownership of a home, a vehicle, a vacation, and often require the repayment of debt. Monies should also be set aside in an emergency fund for unanticipated future expenses. It is important that the disability attorney help the injured party and the family to identify these hopes and dreams, and attempt to assist in their achievement.

• Relationship Between a Structured Settlement and Cash. Often, the structured settlement broker has been involved in the case for many years before the disability lawyer is contacted. It may be assumed that the structured settlement broker has an economic interest in selling as large a structured settlement as possible, because his commission is based on the amount structured. It is our law firm’s experience, however, that most structured settlement brokers are very willing to listen to the recommendations of a disability lawyer regarding the cash needs of the disabled person and his or her family.

Many of our clients are not experts at handling money and may not have good money management skills. A structured settlement helps to ensure that the monies will not be squandered prematurely along with other advantages. On the other hand, clients sometimes do need cash for immediate items, usually for a house, vehicle, and debt repayment. They should always have money set aside for an emergency fund, too.  As a rule of thumb, the cash portion of the settlement should be not less than 50% of the total.

• Monies going into the self-settled special needs trust by lump sum or by payments from a structured settlement are subject to the Medicaid payback. Distributions are also restricted by the “sole benefit of” rule and often by state regulation. Therefore, it is usually advantageous to attempt to allocate as much as possible of the settlement to the other family members. If a case is actually settled, and if there are multiple claimants none of whom are minors or incapacitated persons, most of the time no one really cares how the funds are allocated. If there is a minor or incapacitated plaintiff, the judge does have a duty to see that the interest of the minor or incapacitated person is protected, but most judges will allow reasonable allocations to other parties. It is very advantageous to have the home owned by the other family members, so that it is not included in a payback or subject to Medicaid estate recovery when the person with disabilities reaches age 55. For the same reason, it is also advantageous to have a car owned by other family members rather than the trust. Often, family members have incurred significant debt. It is always helpful to pay off the debt or to at least reduce it.

• A Team Approach.
• Personal Injury Attorney. The Personal Injury Attorney is responsible for obtaining the evidence, developing a strategy, and achieving the personal injury recovery.
• Elder and Disability Law Attorney. The Elder and Disability Law Attorney can assist with the following items:
  • Preparation of Trust and related documents
  • Medicaid Planning, if required
  • Medicaid Application, if required
  • Assistance in identifying and obtaining public benefits to which the plaintiff may be entitled but is not receiving
  • Developing a budget
• It is important to get the right Trustee to assist in administration of the Trust.  The Elder and Disability Law Attorney can assist in selecting the appropriate Trustee.
• Disability Organizations. These organizations are very helpful in advocating for the client with disabilities.
• Financial Advisors. A Financial Advisor assists with determining the plaintiff’s tolerance for risk, developing an Investment Policy Statement (IPS), and thereafter the Financial Advisor assists with investments.
• Certified Public Accountant (CPA). Someone must keep records, file accountings, and prepare income tax returns.  A CPA can be very helpful in this regard.
• Care Manager. Frequently, the plaintiff requires continuing care.  A Care Manager can make an assessment, develop a plan, and either deliver or arrange for delivery of the necessary care.