After an injury or accident, a settlement check can help get you back on the road to success. However, it’s important to know what you can do with it and how to protect your interests.
Receiving a large settlement check can be overwhelming. Some individuals and families have fought and waited a long time to finally receive the settlement they deserve. Knowing what to do with the settlement money is crucial to securing your future.
If you or a loved one were injured and have questions about a settlement check, contact an attorney at 412-906-8180. Our injury attorneys can assist you in managing your settlement award.
What Do I Do With A Large Settlement Check?
If you opted to receive a large settlement check instead of installments, take a breath. This is an emotional time for you and your family. You deserve to take a moment for yourselves and appreciate your win.
While you may have any number of ideas for where the money should go, it is best to take a beat a make a plan. Consider the following:
- Pay off your medical debt and expenses
- Pay down other debts, including credit card debt or your mortgage
- Create an emergency fund to protect against future accidents
- Consider investing for your retirement
In addition, be sure to update your will and create an estate plan. When the unexpected happens, it is better to have a plan in place for your settlement money than to lose much of it to probate and court costs.
Do You Have to Pay Taxes on Settlement Money?
No, in most cases, the state and the federal government will not tax you on the settlement you received for your personal injury lawsuit.
According to the Pennsylvania Department of Revenue, compensation that is excluded from taxation includes the following:
- Public assistance or unemployment compensation
- Periodic payments for disability and sickness outside of regular wages
- Compensation that is used to reimburse actual expenses
- Retirement benefits after an individual has reached a certain age or length of employment
- Income received for active military duty or State duty for emergency outside of the Commonwealth of Pennsylvania
- Disability, retirement, workers’ compensation, and other funds paid for occupational diseases
Injury settlement questions can often involve complex legal issues. Contact a lawyer for advice and guidance if you had any questions about what your case might be worth.
Why Are There Special Circumstances for Occupational Diseases?
In the past, employers had protection from personal injury lawsuits. Injured workers had to make do with whatever workers’ compensation could provide.
However, with the collapse of the steel industry and huge growth in asbestos-related illnesses, including mesothelioma, the state has begun updating certain employer protections.
Workers and former employees who suffer injuries relating to occupational diseases are now entitled to additional compensation through personal injury claims. As such, the government will not tax on funds gained from occupational exposure that led to illness and disease.
What Compensatory Damages Are Included in My Settlement Check?
Your settlement check will be comprised of various compensatory damages, including:
- Reimbursement for medical expenses and property damage
- Any lost wages or income related to your injury or illness
- Pain and suffering damages
- Any mental anguish experienced from the accident or exposure
With a large settlement check, it may be in your best interests to set aside some funds for investment purposes.
Can You Invest Settlement Money?
Yes, investing your settlement money is highly encouraged. Many families choose to invest in their homes. You can do this by paying off your mortgage and reducing your overall financial burden.
If you already own your home outright, investing in needed home improvements can substantially increase the value of your property while reducing future costs. For example, making your home more energy efficient can significantly cut energy costs while adding value.
Other investment ideas include:
- Real estate and creating a rental property
- Stocks and bonds
- Children’s education
- Retirement funds
There are far too many investment options to list. Speaking to a knowledgeable attorney can help you make the best choices for your family.
Protection always begins with education. Be sure to research what opportunities are available. Speak to your family members and anyone affected by the settlement to help you form financial goals.
How Can I Protect My Settlement Money?
There are several ways to protect your settlement money and see that the funds are used wisely. Speaking to a financial advisor or lawyer can help you decide the best way to protect your settlement.
Some protections to consider include:
- Creating an estate plan
- Updating your will
- Creating a trust
- Keeping funds in a separate bank account
Protection always begins with education. Be sure to research what opportunities are available. Speak to your family members and anyone affected by the settlement to help you form financial goals.
Once you have a general idea, consult with a lawyer to help you create a strategy for your settlement check.
How Are Personal Injury Settlements Paid Out?
Personal injury settlements are paid out in either one lump sum or in installments over a period of time. Knowing which method of payment is best for you and your family will depend on your circumstances and what the money will be going toward.
Your personal injury lawyer can help advise you on the best financial strategy for your needs. Speak to one of our knowledgeable attorneys at D’Amico Law Offices today.
Contact A Lawyer
If you or a loved one have been hurt in an accident, the esteemed attorneys of D’Amico Law Offices are here to help. We have represented those injured by:
We have years of experience representing a wide range of personal injury claims and will work tirelessly to ensure you recover the compensation you deserve.
Schedule a free consultation today to discuss the details of your unique case. You can contact us by calling 412-906-8180.