A Pennsylvania resident who has been injured at work or in an automobile accident may breathe a sigh of relief when their personal injury or workers’ compensation case gets resolved and they know that they or their loved one will get compensation.
While it may indeed be a time to celebrate, people who are getting a settlement payment for an injury need to think carefully about certain estate planning issues.
Proper estate planning will make sure that, as much as possible, the settlement proceeds are protected and can be used to meet an injured person’s ongoing bills and expenses.
A guardianship may be necessary
If the victim was a minor child or is not able to make decisions for himself or herself, the family may need to set up a court-approved guardianship in order to manage the settlement proceeds.
A guardianship is an estate planning device families can use so that they have the authority to manage the money of their child or a disabled loved one.
While Altoona parents typically have the right to manage their own children’s property without a court order, having a guardianship still may be a good idea if the child receives a significant monetary settlement.
Other estate planning devices can protect government benefits
In other cases, simply receiving a lump sum settlement may wind up doing more harm than good.
The reason is that many people who have suffered a debilitating injury rely on certain public benefits and programs for support, and receiving a settlement can cost the victim his or her eligibility for those programs.
Certain estate planning techniques, like a special needs trust, can allow a family access to settlement funds without having to worry about the loss of important healthcare and other government benefits.