When you’ve been injured in an accident, how you’ll manage the financial impact might be the last thing on your mind. However, once you recover and begin to think about your future, you may be forced to take stock of the situation. If you have received a settlement from another party as a result of his or her negligence, it’s now time to think about managing that settlement. Regardless of the circumstances, there are general principles that apply to most cases. Get started by reading through these helpful pointers.
Timing
If you are awarded a settlement, you can either take the money immediately or you may have the option to defer payment. This is a very important choice to make, as it will impact your finances for the foreseeable future. If you choose to accept the immediate payment, you may have a large amount of cash on hand. This may be useful in dealing with immediate financial pressures such as medical bills. However, this large amount of cash also carries significant risk. If you receive a large settlement but do not have a financial plan in place for managing this amount, you may find yourself quickly running through it.
Negotiating
One of the first things you need to do once you receive a settlement offer is to decide whether or not you should accept it. While you may be able to influence the process, there is no guarantee that you will receive a larger settlement offer. There are, however, some things that you can do to help increase your chances of getting more money. Especially if you’re suffering from a serious injury that was clearly the other person’s fault, you can likely get more than the first offer that you receive. It’s a good idea to engage a personal injury attorney as soon as possible after your accident to ensure that you receive the compensation you deserve.
Setting Up a Trust
While you are deciding how to spend your settlement money, you also need to decide what percentage of your total settlement should be kept in a trust fund. A settlement preservation trust is a financial account that is used to hold the remainder of the money that you won in court. If you keep a large portion of your settlement in the trust fund, you’ll have funds available to meet unexpected expenses and you’ll also have a financial safety net in case you run into financial hardship. Not only can you protect your assets from creditors, but you can also set provisions to ensure that your beneficiaries use the trust the way that you want them to use it.
The better you are able to manage your settlement, the better able you will be to see the benefits for years to come. The key to successful settlement management is having an organized plan from the very beginning. By understanding the process and putting these steps into practice, you can ensure that your settlement is available for you when you need it most.
