What is a Settlement Plan?

HomeTrusts and Asset ManagementWhat is a Settlement Plan?

A settlement plan is a detailed, comprehensive look at a client’s financial situation with specific recommendations designed to help a client be in the best possible financial position after receiving settlement proceeds.

What is Settlement Planning?

Settlement planning involves allocating the net recovery from a legal settlement to maximize the ability of the recipients and their guardians to meet their needs and goals. Settlement planning should end in a transition to a more permanent financial planner that will assist the claimants to take control of their financial future. By setting financial goals, developing and implementing financial strategies, and monitoring progress on a regular basis, the likelihood of achieving financial goals is greatly increased.

Why Develop a Settlement Plan?

What is Settlement PlanningMost people have difficulty managing a large settlement. Many opportunities and hazards present themselves even before the settlement is in hand and others arise after the money arrives. Many times the settlement plan includes the use of unique planning vehicles such as special needs trusts, structured settlement annuities, and other complex instruments. If a minor or incompetent injury victim is involved, the law may require a guardian-ad-litem to review the plan and make a recommendation to a judge who must approve any settlement. Therefore, it is expedient to formulate an intricate, sensible and long-term strategy as soon as possible to ensure that all of the parties agree that the plan is in the best interests of the recipients. In designing a settlement plan, our team develops a better understanding of the client’s current financial situation and the need to zealously manage sufficient financial resources to meet their financial needs.

What Areas Will a Settlement Plan Address?

A settlement plan is tailored to each client, so each plan will address only the areas pertinent to that client. A typical plan addresses the following areas:

  •  financial needs and planning;
  •  estate planning concerns;
  •  guardianship designation for minors;
  •  and tax planning.

You May Also Like…