No doubt, a settlement is life-changing. Developing the most informed plan possible is a critical step to take before a plaintiff receives his or her settlement proceeds.
To come up with the right plan for an incoming settlement, a comprehensive settlement planning firm will take a holistic look at a plaintiff’s situation and combine strategies involving wealth management, long-term risk analysis, future healthcare costs, and trust protection. With a plan in place, the settlement proceeds will be able to meet a plaintiff’s immediate and future needs.
Risks to Consider When Planning for Settlement
When a person receives settlement proceeds to pay for medical care and other injury-related necessities, their assets may come at risk later in life due to dissipation or catastrophic loss. Dissipation can occur over time as a result of big life events such as divorce or starting a business; a catastrophic loss is immediate and impactful, such as bankruptcy.
Safeguarding Against These Risks
To protect against these risks, a settlement planner may suggest establishing a domestic asset protection trust (DAPT). A DAPT is an irrevocable trust that gives one the opportunity for lifelong planning and protection of one’s assets. And this doesn’t just apply to settlements – anyone can get a DAPT to protect their assets at any time.
Protecting assets from catastrophic loss is like buying an insurance policy for your home. When a settlement is intended to cover the expenses for an injured person’s lifetime, establishing a DAPT should protect against judgments, creditors, bankruptcy, divorce, business failure, and liability from accidents.
With the right plan and trustee, a DAPT can be an effective option for a parent or spouse caring for a disabled person. This kind of trust can also be useful in protecting the assets for young adults when established in a jurisdiction that favors the protection of trust beneficiaries; a DAPT can protect against most catastrophic losses to which the financially young are particularly vulnerable.
If you or someone in your care is approaching settlement, feel free to contact my firm, Milestone Consulting, for advice about where to start in the process. Making the best choices with your settlement proceeds — and receiving much needed asset protection into the future — starts with being as informed as possible.
About John Bair
John Bair has guided thousands of plaintiffs through the settlement process as co-founder of Milestone Consulting, LLC, a broad-based settlement planning and management firm. Milestone’s approach is comprehensive and future-focused. John’s team has guided thousands of clients by taking the time to understand the complexities of each case. They assess the best outcome and find the path that enables each client to manage their many needs. Read more about Milestone Consulting at http://milestoneseventh.com/.
A West Point graduate where he served as captain and military aviator, John Bair continues his commitment to our country through his efforts within the settlement planning industry. He has represented families of victims lost in the Flight 3407 crash, offered pro bono services to the families of 9/11 victims and drafted the first consumer protection bill for plaintiffs (H.R. 3699).