If you’ve been wrongfully injured, filing a lawsuit is a big step toward getting the justice you deserve. But what many women don’t consider is what their life might look like after their lawsuit has resolved and they are receiving a settlement. Yes, winning a lawsuit is a bittersweet moment as it forces you to recount the circumstances that caused you to file while also giving you a small moment of gratification knowing the responsible entities were held accountable. But what happens next after you have received your settlement?
An influx of income carries with it a lot of opportunity, but also a lot of responsibility. It can often be beneficial for a plaintiff and her attorney to work with a settlement planner who can establish a financial plan that’s tailored to the plaintiff’s future needs and goals. Would you rather take periodic payments or accept the settlement in one lump sum? What is the most tax advantageous way to receive your money, and what about future investing? Do you have government benefits you have to make sure you keep? These are questions that can best be answered by experts such as those at the team at Milestone. So, we teamed up to do just that! Introducing Milestone Consulting, a top-notch settlement planning company with *all* the answers.
Q: First, What is a settlement planner?
A: Settlement planners work with individuals and families nationwide to identify the best financial tools available to those specifically receiving settlement money from a personal injury case. They help families navigate their life post-litigation, whether that be by establishing a trust with their settlement money, making sure they maintain their government benefits, identifying the most advantageous tax strategies, or setting up recurring periodic payments rather than receiving the settlement in one lump sum. The last thing you should have to worry about after a lawsuit is the financial responsibility that comes with the settlement. By having a team such as Milestone help you navigate through the weeds of mass tort settlement planning, you set yourself up for the best possible financial outcome.
Q: What kind of cases has Milestone worked on?
A: We have supported plaintiffs from dozens of mass tort cases – including MDLs primarily involving female victims such as Yaz, Simply Thick and Essure – and know the ins and outs that come with a mass tort settlement. Our team of planners are trained in trauma-informed care and treat every case with the compassion and expertise it deserves.
Q: Can you explain the timeline a little bit? After a settlement has been agreed upon, how long will it take for people to receive their payout on average? Why does it take time?
A: Every settlement and set of circumstances is a little different. With MDLs or mass torts, they are a little more complex than a single injury case. These usually involve a Master Settlement Agreement, meaning the case will settle for a total aggregate dollar amount, and then each plaintiff (sometimes thousands of individuals!) needs to sign their OWN release. Collecting over a thousand releases could take months. But when those are all returned, the defendants have usually 30 days to pay; sometimes it’s 60.
In a mass tort, plaintiffs usually won’t see their money for at least a few weeks to many months after the defendant pays, since liens need to be resolved first. So settlement-date-to-client pay dates definitely vary. Every attorney we work with does their best to have their client paid as soon as possible.
Q: What about benefits? Generally are benefits affected by a settlement coming to fruition, are benefits affected more case-by-case? For example, what can happen with social security disability or VA benefits?
A: Many government benefits programs (Supplemental Security Income (SSI), Medicaid, Supplemental Nutrition Assistance Program (SNAP), federally-assisted housing, and the Children’s Health Insurance Program (CHIP) are a few examples) are means-tested, meaning you have to remain below a certain income-threshold in order to qualify for them. Receiving a settlement can disqualify you from these benefits programs by putting you over the income threshold, thus making you ineligible. Our settlement planners are well-versed in how to best structure the payout of awarded settlements to ensure continuity and preservation of government benefits. We understand how critical maintaining these benefits is to many families.
Q: Is there something to keep in mind with my lawyer re: my taxes? Does it make a difference if the settlement is paid as a lump sum or in recurring installments?
A: Yes, how you receive your settlement can affect your taxes. The good news is personal injury settlements are always tax exempt, meaning you do not have to pay taxes on the settlement money. But there are many savvy financial planning strategies that plaintiffs (and their attorneys) can utilize in order to make sure their long term financial plan for the settlement will continue to have tax benefits. You can choose to structure your settlement money through a series of recurring payments that you receive on a schedule of your choosing – for example, a monthly distribution or quarterly distribution – and combine this with an investment strategy. If you do this, then the growth on your funds is also tax exempt!
Attorneys can structure their funds in a similar way, and defer the taxes they have to pay.
Q: What if — full disclosure — I went through a divorce and don’t want my ex to receive settlement money? Is there something to keep in mind if I’m in divorce proceedings?
A: There are multiple planning tools we can use to promote asset protection, including special types of trusts, structuring of the funds, and other financial designs to assist you with your own personal set of circumstances. If you have asset protection questions, the answers are typically tailored for each specific situation.
Q: I know, I know, but I have to ask: What’s the benefit of me setting up my will or estate if I’m taking legal action? Is my estate factored into settlement planning?
A: What happens to you, your family, and your funds after you pass away is a significant part of the settlement planning process. By working with a settlement planner, you can help ensure that you and your family will be well taken care of now and into the future. Estate planning is a critical part of settlement planning.
Q: Are there different factors to consider for someone who is just getting started in their life and career? Are there different factors at play in my settlement planning? What if I marry someone after the settlement proceeding?
A: Yes. Each individual person has their own goals, dreams and specific set of life circumstances, and those should all be taken into consideration when you plan out what you’d like to do with your settlement. We create individualized plans for each person and their family. While age and marital status are factors to consider, they’re just two of many that make up a person’s whole financial picture. We also take into consideration debt ratio, earned income, state of residence, future medical needs, etc.