How Is a Personal Injury Settlement Allocated in an Estate Plan?

No matter how careful you may be, accidents can still happen. Whether it’s a vehicle collision or slip and fall accident, an accident can result in serious injuries. If it was caused by another person’s negligence, you have the right to pursue compensation. If you recently received a personal injury settlement, it’s important to handle it with care.

What Types of Damages Can You Receive in a Personal Injury Settlement?

If you were hurt in an accident that was someone else’s fault, you may be entitled to receive several damages in your lawsuit, including:

  • Medical bills
  • Future healthcare expenses
  • Lost wages
  • Property damage
  • Emotional pain
  • Pain and suffering

How Can a Personal Injury Settlement Affect Your Estate Plan?

If you received a personal injury settlement, you should take a second look at your estate plan. After you have paid off your medical bills and other losses, you may have money left over from your settlement. If you want to potentially leave that money for your family, you must make changes to your will. Here are a few ways your settlement may affect your estate plan:

  • Personal Debts: When you die, your debts don’t just go away. Your executor has to pay off the debts with money from your estate. Unfortunately, this reduces the inheritances your heirs will receive. If you have a large settlement, consider paying off your debts now.
  • More Taxes: Although personal injury settlements are tax-free, you may be required to pay taxes on it if it’s part of your estate. However, you can establish an estate plan that reduces taxes. For instance, you could place it in a trust.

Should You Hire an Estate Planning Lawyer?

If you plan on including your personal injury settlement in your estate plan, it’s in your best interest to work with an experienced estate planning lawyer. He or she is well-versed in all the current estate laws and will help you make the necessary updates.

An estate planning lawyer will also make sure that your documents say what you want them to say. As the lawyers at Cohen & Cohen understand, estate planning terminology can be quite confusing for the average person. If you misinterpret something, your documents may not do what you want them to. Your lawyer will make certain your personal injury settlement goes to the correct people.

If you have additional questions about including your personal injury settlement in your will, contact an experienced estate planning lawyer today.

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Article Name
How Is a Personal Injury Settlement Allocated in an Estate Plan?
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How to handle a personal injury settlement in an estate plan.