Posted in California Law,Personal Injury on March 13, 2019
After you suffer an injury and file a personal injury lawsuit, you may receive a substantial amount of money as a settlement. The court usually makes these awards to compensate for certain expenses related to your injuries, such as past and future medical expenses, lost wages, and pain and suffering. You want to keep these funds safe to pay for the expenses that may accumulate in the future – and a personal injury trust may assist you in protecting your assets.
Overview of Personal Injury Trusts in the United States
A personal injury trust is a mechanism you can use to hold your settlement funds under the oversight of trustees, or people you choose to have control over your money. These trustees authorize each transaction to ensure that you spend your money in a way that is in your best interests.
Simply put, a personal injury trust is a legally binding agreement that helps you manage your injury settlement funds under specific rules. You will appoint two or more trustees or a trust corporation to manage your trust for your benefit. In this arrangement, you are the beneficiary.
You can set up multiple types of trusts in the United States, but not all trusts are the same. Personal injury trusts are unique from other trust funds for a number of reasons.
- You usually set up your personal injury trust yourself. You serve as both the settlor and the beneficiary. Usually, victims of personal injuries who have the mental capacity to manage their own assets are the ones who establish their own trusts.
- As beneficiary and settlor, you receive the funds out of the personal injury trust. If multiple people are involved in your case, you can have multiple beneficiaries tied to your trust. It all depends on how you want to set up your trust and the circumstances of your settlement.
- When you establish a personal injury trust, you can only put your settlement fund and other related payments into the account. These funds can include compensatory damages, any life insurance or car insurance payouts, or charitable donations.
Benefits of a Personal Injury Trust
Many victims of personal injuries refrain from setting up a personal injury trust because they do not understand the advantages that these accounts can provide. If you want to establish a personal injury trust to manage your personal injury settlement, you can reap significant benefits.
- Personal injury trusts help protect the interests of vulnerable people, especially those who are very young, very old, or disabled in some way. They can help these individuals from falling victim to fraud or coercion since the funds are only payable to the beneficiary and all trustees must authorize the transactions. If you want additional protection over your settlement, consider setting up a personal injury trust.
- When you appoint trustees to represent your personal injury trust, you benefit from their extensive knowledge and experience in money management. When you choose qualified trustees, you can receive valuable support and advice concerning important financial decisions. As a result, you can ensure the appropriate management of your settlement funds to benefit you in the long run.
- If you keep all of your funds within one account, you can forget which funds you have to use for specific personal injury expenses and which funds are free to use for whatever you desire. Personal injury trusts provide easy categorization so that you can manage your funds in the long run, keeping your settlement funds separate from your other assets. This separation will be especially helpful in protecting your financial and personal interests over time.
Your settlement funds are important for your long-term well-being and security, especially if you suffered from severe injuries. If you want to set up a personal injury trust to manage your funds, you should seek the advice of a personal injury attorney in El Cajon or La Mesa.