If you’ve recently received a settlement or won a case with the help of a personal injury lawyer, it may be time to update your estate planning. Because a settlement will often increase your net worth, it can make your estate planning more important than ever.
When people think of hiring an estate planning lawyer, they usually are thinking about a simple will. However, limiting yourself to a will can be a mistake.
In some states, probate is an expensive, court-supervised process, and the more assets that are involved, the more expenses and delays occur. In those situations, it makes sense to have an estate planning attorney draft a revocable living trust. A revocable living trust is a tool that removes your assets from the probate process, saving your loved ones many expenses and delays.
Should your injuries worsen over time and you become incapacitated, a revocable living trust will make management of your assets much easier. If you are unable to care for yourself, the successor trustee you appoint in your revocable living trust can manage your settlement proceeds on your behalf, and use them as necessary to pay for your care.
An estate planning attorney will also likely want to draft a medical power of attorney for you. The person you appoint in your medical power of attorney will make your medical decisions for you in the event your injuries progress to the point where you are unable to make your own decisions. This can help prevent ugly family fights regarding your medical care.
If your award is very large and increases your net worth over $5 Million, your estate planning lawyer will likely want to discuss planning for the federal estate tax. If you don’t plan for this tax, up to 40% of your assets could be lost to the government rather than being passed down to your loved ones.
Lastly, since your award may need to finance your care for the rest of your life, you may need to find an investment advisor. This can be very tricky, as many investment advisors seek to maximize their own commissions rather than provide the best advice. It is important to look for an advisor bound to a fiduciary standard, such as a Certified Financial Planner or fee-only advisor. A trusted estate planning lawyer can make a referral to such an advisor to make sure your award lasts for a lifetime of care.