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Personal Injury Awards and Estate Planning

When an individual is injured in an accident or becomes ill due to the negligent actions of another party or parties, state law allows them to pursue damages against the at-fault party for the losses they have suffered because of the injuries or illness. This can include financial compensation for medical expenses, lost income, pain and suffering, emotional anguish, and more. If the victim has been left with permanent disabilities, the award they receive can be substantial.

It is important for personal injury victims to update or create estate plans once they have received their settlement to make sure that their wishes will be kept in the event they become incapacitated or upon their death. There are other considerations that need to be addressed, as well. A wills and trusts lawyer Scottsdale AZ citizens rely on can help with any questions.

What Is an Estate Plan?

An estate plan addresses many issues. Not only does it address who should receive any assets and property you have when you die, it also addresses who will make financial and medical decisions should you become unable to do so. By having these plans already in place, your loved ones avoid the necessity of guardianship and probate proceedings later on.

If you have minor children, your estate plan can name who should be their legal guardian and also make financial arrangements for their care. The most common tools used in estate plans are wills, trusts, power of attorneys, and living wills. Your estate planning attorney can go over what are the best options for you and your family in your situation.

How Can a Settlement Impact Estate Plans

If you do receive a substantial settlement amount, this will increase the value of your estate. This means that you may be able to leave your heirs a larger inheritance amount than you had planned before you received the settlement. However, this could also mean a large estate tax burden on your loved ones. There may be ways to reduce this tax burden and your estate planning attorney can discuss the different options, such as setting up trusts, which you may have.

Smaller Inheritance Amount

On the other hand, if your injuries were substantial and require lifelong care, your settlement amount may not necessarily cover it all and you may be forced to tap into financial accounts that had originally been set up as part of your estate plan. If you are concerned about long-term care planning, your estate planning attorney can go over all of the possible options you may have. For example, if your injuries will at some point require you to live at a nursing home facility, there may be ways that your attorney can set up your estate to protect your family home and other assets.

Living Will and Advanced Care Directive

Many accident victims who are left with permanent disabilities face a future of medical complications. These complications can often be serious ones that could cause the victim to be unable to make medical decisions about their care. If you have your attorney draft up a living will and advanced care directive, you will take that emotional burden of making these decisions for you off your loved ones’ shoulders, while also ensuring that your wishes for your medical care will be respected.

 

Thanks to our friends and contributors from Arizona Estate Planning Attorneys for their insight into estate planning.


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