Settlement Planning for Non-Traditional Clients

HomeTrusts and Asset ManagementSettlement Planning for Non-Traditional Clients

In helping thousands of personal injury recipients over the years, we’ve found that most personal injury settlement recipients are not financially sophisticated. These clients have never had to manage a substantial amount of money. They usually don’t have financial advisors.

In these cases, attorneys realize these clients need financial guidance, and they will often bring us in to help these clients. The attorneys recognize that without a plan, these clients will often quickly dissipate the settlement funds.

However, in situations where the personal injury settlement recipient does have means and is more financially sophisticated, attorneys don’t think there is a need to call us at the time of settlement. They feel like the family or individual doesn’t necessarily need our services.

Settlement planning options can still be helpful for non-traditional clients, especially for those with existing financial plans in place.

We recently met with a financially sophisticated family who was receiving a sizable settlement. They had experience managing money. Despite their financial acumen, this family found great value in going over their different options at settlement, including options unique to personal injury recipients. This family liked the thought of a structured settlement annuity. The tax-free nature of structured settlement annuity made sense for this family because they were in a high tax bracket — and liked the idea of receiving future payments without any tax consequences.

As we further discussed their situation, they mentioned that he wanted to revisit their prior financial plan in light of this settlement. Their estate plan was outdated and needed to reflect this family’s new needs and challenges. We talked about purchasing an umbrella liability insurance for themselves to provide some asset protection and peace of mind.

In short, when clients are likely to mismanage settlement funds, it’s apparent to the attorney that the clients would benefit from comprehensive settlement advice.

However, even when you have a case with a sophisticated client, there’s significant value in meeting with a settlement planner to discuss their needs and goals and to review their financial plan, strategize to minimize taxes, and update their estate plan.

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