There are two different types of settlements following a lawsuit: a structured settlement or a lump sum. They are pretty self-explanatory, but the lump sum is where you would receive all of your monetary settlement from law offices in Las Vegas in one hit. Structured settlements are regular monetary payments made to you over time as agreed by your personal injury attorney in Las Vegas. Whichever way you choose to accept your settlement, you will have some big decisions to make. What you do with the settlement will likely depend on the type of settlement, the amount that you receive and what’s going on in your life at this moment in time.
Now that you have received your settlement, and your case is finally over, it’s likely you’re feeling that mix of relief and anxiety about what to do next. The biggest thing that you need to consider now is how to ensure that you don’t blow your newfound wealth within the next few months. It can happen to a lot of people when they settle, and you want to avoid this outcome for your settlement.
What To Do With Your Settlement
Let’s take a look at a few of the things that you could do with your settlement money. If you are worried about what to do, ask the experts at Ed Bernstein & Associates, your Las Vegas accident lawyers. We’ll be more than happy to assist!
Start With Taxes
When dealing with a large sum of money you need to understand how much you are going to be taxed. It’s the first thing to think about when it comes to settlement money management. It’s the best thing to do when you have a large amount of money, especially as most settlements will be subject to income taxes. There are exceptions to this, as personal injury payments are usually excluded. The settlement that you get can be subjected to income tax demands if the claim included:
- Breach of contract
- Lost profit
- Back pay
- Punitive damage
- Copyright infringement
Starting with your taxes can help you to understand what you have leftover to work with from your settlement.
Get Solid Advice
Getting a settlement is a big deal, especially if the case is a long one. A financial advisor could be the best person to discuss your settlement with, as they can help you to keep a clear head while they assist you with managing your money. The decisions that you make with your settlement could change your life, and without the right help and advice, this could be a big worry on your shoulders. A financial advisor can help you create a plan and a strategy for your sudden wealth. They will be the person who helps you to say “no” in some situations, too.
Wait Before Spending
You don’t have to spend all your new settlement money on the day that you get it. It’s okay to take a moment and wait. You’ve been through a rough case, and it’s finally at a close. Buy a bottle of wine and just breathe. There’s time to evaluate those options in front of you, and you can place the money in a high-interest account while you are deciding on what to do.
Pay Your Lawyer
Contingent fees are important to pay if you aren’t involved in a no-win, no-fee case. If you were, the law offices in Las Vegas would take their percentage cut from your settlement before passing you the rest of the money. Once you set aside the money you need to pay your legal team, you can focus on what’s left.
Create a Plan
Sit down with a notepad and create a plan for your settlement funds. If you don’t have a clear outline of what you want to achieve with your money, you will spend it faster than you wanted to in the first place. Think about how long you need it to last and about what you may need to pay for. If your injuries are going to be there for the rest of your life, you need to plan ahead for your care and your medical bills. You may also have goals that will make living with a permanent injury much easier.
Pay Down Debts
A large financial windfall is going to be a relief after the stress of an accident and the legal case afterward. Any medical bills and day-to-day bills you may have run up while you’ve been treated for injuries will need to be paid, and it will help you to pay these debts off first. You will need to create an emergency fund to keep in the savings account. This should equate to at least six months of your regular living expenses, keeping you out of debt in the future. Your financial advisor can help you to plan this properly, letting you know how best to invest your money.
If you have children, or you’re planning to have children, put some money aside to pay for their education. You can even pay into an education plan for yourself, too, if you plan to better your future. Higher education is costly and you can protect the educational future of your children or yourself with your settlement. It’s a gift you are giving them and you.
Buy Your Home
Do you own your home presently? Pay it off. Use the settlement money to pay for your home and clear the mortgage. Not only do you have the chance to alleviate the financial burden of a mortgage, but you can then have an additional asset for financial security in your life. Plan this carefully with your financial advisor before you start paying it off, though, just in case you can’t cover it entirely.
Once you have the money, put aside something for you. A new car or a vacation or the costs of adapting your car to suit a new disability can all work. Don’t blow the cash, but be smart about how you can also get something for yourself.
Contact Ed Bernstein & Associates Now
If you want some help with your settlement, or you want to know more about a case that you already have, give our team a call today on 702-240-0000, and our excellent Las Vegas lawyers will be more than happy to discuss your case.