It’s a sad fact that over 90 percent of personal injury victims no longer have any of their awarded settlement income in less than five years. If your plaintiff client is a minor, this can be especially concerning as you want to ensure that you develop the right investment options for them to ensure their settlement is intact when they mature.
In this brief article, a settlement planner will explain many of the benefits of developing a settlement management trust to work in tandem with structured settlement payments for your personal injury clients that are under the age of 18.
One way to protect a beneficiary’s assets is through a structured settlement. When properly arranged, a structured settlement provides the individual with a reliable stream of income over time. If you have a client that is a minor and has no urgent need to access their settlement income, they can receive payments incrementally (or in a lump sum) to aid them in the future when they will have a stronger financial need for the income (college tuition, buying a house, etc.). Structured settlements are also tax-free and do not include additional expenses once they are established.
Settlement Management Trust
Although a structured settlement is a great option for a client that has no urgent need for the settlement income, in many cases the minor has some current financial needs including medical care or day-to-day expenses that need to be accommodated. Developing a settlement management trust allows the beneficiary access to the income through a trustee. Although there are more fees involved in creating a trust rather than a structured settlement plan, there are many benefits. For example, a trust can actually work alongside a structured settlement plan as these periodic payments from a structured settlement plan can go directly into a trust. With a trust in place, clients have more flexibility to access finances when they have additional expenses and they can also enjoy many tax advantages the trust presents.
If you are interested in learning more about our asset management services, please contact Synergy Settlement Services today. We can evaluate your client’s best interests and develop a court-approved plan that will maximize your client’s settlement and provide them with the assets they need long-term.
For more information or to schedule a consultation, please submit our contact request form.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.