You’ve been through a lot by dealing with both recovering from your injury and also going through the legal process to get your personal injury settlement. If you were injured through no fault of your own then you deserve every bit of your settlement that you get.
You may have lost income from the time that you were recovering, or even future income as a result of your injuries. The settlement that you get is deserved, but also needs to be cared for. If you have ongoing medical expenses or that loss of work we mentioned, then this money will need to last you.
This means that you need to take some protective measures to make sure that your money is going to last you a while. In this article, we will go over the things you can do to protect your settlement money.
Why your settlement needs to be managed
It is a logical thing to want to not waste your money that you and your lawyer have struggled to finally get. If you had hired a good one like Lamber Goodnow Injury Lawyers Tucson then the sum could be quite high. But there are reasons it needs to be managed beyond just wanting to stretch it. For instance, if you are on state benefits, then you need to also make sure to protect your rights to the means testing for those benefits.
There may even be a case in which your injury or another illness hampers your ability to be able to handle the money in a safe and responsible way. Protecting your money could be protecting it from yourself even.
Once you have your money protected then you can focus on how best to invest it so it can provide you with an income for the rest of your life.
Court of Protection Deputyship
When you have problems with your mental state or injury or for whatever reason you’re unable to deal with the settlement yourself, then a court will appoint a deputy to manage your settlement. This requires an application to the Court of Protection to appoint the deputy.
Once accepted then they will take control of your settlement to make sure it is not being managed improperly. Often when a person is not in the right mental state to make financial decisions this money is easily defrauded from them. The deputy will make sure that this doesn’t happen.
Make sure that this is actually what you need to do as the deputy will also be taking over your general finances and legal affairs. In other words, they will act as a general custodian for you.
Personal injury trust
There are different kinds of trusts that people often use to manage their money. For instance, you could set up a trust for an inheritance for a child so it is managed for them until they reach a certain age.
In this case, a trustee is in charge of handling the affairs related to the settlement. They take care of the incoming and outgoing payments that stem from the settlement. Payments can be one time affairs or ongoing expenses that will be paid directly from the trust. Usually your living expenses will be handled separately outside the trust, however.
Having a trustee do this is to ensure that only the essentials are being paid and the money is not being spent without any oversight.
Investing the money
If you are not very good with money in general, but want to make sure that the settlement continues to pay off long after the payments have been made then you can have the trust invest all of the money or a portion of it. They will find a financial advisor who is legally obligated to make decisions that directly benefit you via the trust.
This is a great way to have your money work for you and bring in additional income. There are a number of safe ways to invest that don’t put your settlement at risk. Of course, any investment comes with a certain level of risk, but there are some stable investment methods if you are risk averse.
For instance, index funds pay out a very decent return of 6% to 8% on average with very low risk of losing your capital if the markets dip. Any income generated by the trust is for the trust but the income will need to be taxed so you will have to claim it on a tax return.