The total value of your assets could be impacted if you have been awarded a personal injury settlement. Receiving compensation following an accident can be incredibly helpful for paying off mounting debt that you may have incurred as a result. Working with an estate planning attorney may be helpful in understanding how your estate could be impacted following a personal injury award.
Keep a Record of Expenses
It is likely that you were financially impacted if you have been the recipient of a personal injury settlement. If you were injured in an accident, you could have a substantial amount of expenses from lost wages or even medical bills. A settlement award could total in the hundreds of thousands, especially if you sustained injuries that have a lasting impact on you. It will be important to keep clear documentation of all expenses and documentation that were from the accident because when a personal injury award is awarded it could have a huge impact on a person’s income. Any documents associated with estate planning should document these changes. Be sure that you are as accurate as possible when it comes to reporting your assets, if you over report, you risk paying higher taxes.
Understanding Estate Taxes
Federal Estate Taxes: In some situations, exemptions may apply when it comes to federal estate taxes. Despite this, there is a limit to the amount of settlement a person can receive before they must pay taxes. Being in compliance with federal regulations, may require the estate plan to change.
State Estate Taxes: The laws regarding state estate taxes can vary by state. It’s important to have detailed knowledge of this as some states do not impose a tax on property. In some situations, you may only be required to pay one type of estate tax.
Developing an Investment Plan
It may make sense to work with an investment planner to receive guidance around how you may want to invest your money. It will be important to consider any expenses that you will need to settle prior to investing your settlement. With an experienced professional, you can invest in funds with confidence knowing that your money is placed somewhere that keeps it safe from paying any fees and/or taxes that are unnecessary.
When it comes to a personal injury award, contacting an attorney, like a estate planning lawyer Phoenix AZ trusts, can help you to plan how your assets will be dispersed to your loved ones after when you are no longer with them. Working with an attorney who has knowledge of estate planning can help you to have control around the process of how your beneficiaries will receive your assets and property.
Thanks to our friends and contributors from Kamper Estrada, LLP for their insight into planning your estate after a personal injury award.