This week, a friend and talented estate planning attorney, Jeremy Cooper, has graciously agreed to contribute a few words about planning for personal injury settlements. Here is what he as to say:
Many clients assume all lawyers know everything about the law. Unfortunately, that is not the case. Most lawyers specialize in a specific area of the law, and while they do become very knowledgeable in that area, they seldom learn little more than what they learned in law school about other “less interesting” areas of the law. It is in this spirit that I have come to guest post on the Morris Anderson blog and shed some insight into the fast paced world of estate planning and asset protection.
In general, estate planning encompasses the practice of helping clients appoint individuals who will make legal and health care decisions for them in the event of death or incapacity. This is accomplished through the use of documents like living trusts, last wills and testaments, powers of attorney for health care and financial management and medical directives. Many individuals mistakenly believe that estate planning is solely for the wealthy; however, any person who has assets, like a personal injury settlement, children, or faces the prospect of dying is in need of at least some of these documents.
The foundational document of a comprehensive estate plan is a revocable living trust. A revocable living trust is a document wherein a client can dictate who receives his/her assets at death and avoid the process of probate, or court involvement, in distributing those assets. Probate can be expensive and very time consuming. If you have received a personal injury settlement, it would likely be worth your while to consult with an estate planning attorney to determine if a trust or other estate planning documents make sense for you.
A companion area of the law to estate planning is asset protection. As the name indicates, this area of the law is all about keeping your assets safe from potential liability and frivolous lawsuits. Asset protection is generally achieved through the use of irrevocable asset protection trusts, limited liability companies and statutory exemptions. Clients who properly implement asset protection strategies stand to garner tremendous benefits in the event of bankruptcy or other creditor challenges; however, because of the degree of sophistication, it is very important to consult an attorney experienced in the area of asset protection.
If you’ve received a substantial personal injury settlement and plan to invest your proceeds, in order to maximize protection and minimize court involvement, the proper estate planning and asset protection structure should be put in place from the outset regardless of your choice of investment. The timing of implementation can be the difference between a success and failure when it comes to the effectiveness of your structure.
Don’t be afraid of speaking to an estate planning attorney. Most estate planning attorneys offer free consultations and would be more than happy to discuss whether or not an estate and/or asset protection plan is a good fit for you.
About The Author
Jeremy K. Cooper is a partner with COOPER | COONS, Ltd. Jeremy’s practice is focused on estate planning, asset protection, trust administration, probate, and any matters related to these areas of law.