Settling a personal injury case is an exciting experience. Now you know that you will receive compensation for your injuries, and you won’t have to go through the hassle of a trial to get it. Nonetheless, there is still work to do to ensure that you make the most of your settlement. At Alliance Law Group, we review these important considerations with our clients and answer any questions that they have.
Receive Your Settlement
Your lawyer will deduct their fee, which you agreed to when you signed an engagement letter. Typically, they will take 33-40% of the settlement amount and then write a check to you for the remainder.
Consider the Tax Implications
Most of our clients bring personal injury claims for physical injuries suffered in an accident. They receive compensation for:
- Medical care
- Lost income or wages
- Property damage
- Pain and suffering
Under IRS rules, these damages are not taxable if they are awarded to compensate for personal physical injuries.
However, if you received punitive damages as part of a settlement, those are taxable. You should carefully analyze how much you need to set aside, working with an accountant if necessary.
Pay for Pressing Needs First
You probably have some bills which you must address. If you couldn’t work after the accident, you probably worked with your mortgage lender to get payments suspended. Now that you have a settlement in hand, you need to catch up, otherwise the lender could start foreclosure.
Other pressing needs might be family medical or educational expenses, or unpaid credit cards. You can pay off these bills quickly once you have a settlement.
Continue with Your Medical Treatments
Someone with a disability could need years of rehab. You should continue with these treatments to ensure you get as healthy as you can.
Research Investment Options
Depending on your injuries, you might not make as much money going forward. Many of our clients need to take a lower-paying job, or they can only work part time. Others cannot work at all. This settlement might have to tide you over until old age.
You should meet with a financial advisor to discuss how to invest it. Look for income generating investments and be frank with your advisor about your financial state.
Each person’s appetite for risk is different. But if you invest in very risky assets—like cryptocurrency—you could end up losing everything. For that reason, you should work with a professional who can help you make sensible investment choices.
Continue Other Lawsuits
You might have been injured by two or more people. For example, a bus could have hit your car, causing a spinal cord injury. You settle with the mechanic who did shoddy repairs on the bus. But you still have a case against the bus company and its driver.
The fact that you settled one case doesn’t mean you’ll settle all of them. Some defendants might force you to litigate in court. Stay on top of your other cases by talking regularly with your lawyer.
Call Alliance Law Group
We have helped settle countless lawsuits for accident victims, and we would be happy to discuss your case with you.