Page 14 - First Coast Vol 4 No 2
P. 14

LINDSAY L. TYGART | Personal Injury
The Importance of Protecting Your Client’s Financial Future Post Settlement
One of the most rewarding as- pects of practicing law is the di erence that we make in our
client’s lives. A successful settlement or verdict can be life changing. Some- times, this is the only opportunity an injured child or adult may have to access quality medical treatment and  nance the burden of living with his or her injury.
 e question o en remains – as at- torneys, does our duty to act in the best interest of and protect our client end when documents are signed, and checks are cut? Or, do we have a re- sponsibility to do more at settlement? Clients face signi cant challenges during and a er resolution, many of which a cash lump sum and parting handshake is not enough.
Clients have the option to receive part of their settlement over time – as a structured settlement.  is arrange- ment allows funds inside of the struc- tured settlement to grow income tax- free resulting in a larger total recovery to the client. Punitive damages and non-physical injury cases are taxable, or if structured, tax-deferred until the year payments are received. Future payments can also be guaranteed for when they are needed most, even for a lifetime. Most importantly, structured settlements protect vulnerable clients from people that may harm them or unsound investments that may put their  nancial security at risk.  is al- lows injury victims to focus on their health and recovery rather than man-
aging a large sum of money with no ex- perience or knowl- edge.
It is imperative that attorneys in- volve a dedicated structured settle-
ment expert to assist with the process and consult on the design of a pay- ment plan that is sound and appropri- ate for the client. In any minor’s case or in cases where my client is consid- ering a structure arrangement, I al- ways rely on Nathan Evans with Arca- dia Settlements Group in Jacksonville.
I recently settled a medical malprac- tice/wrongful death case involving the death of a young mother during childbirth. In this case, her only legal survivor was the baby boy she le  be- hind. Because this child is only 3 years old, Nathan was able to work with his guardians and devise a  nancial plan which would begin paying at age 18 and  nance any college expenditures or living needs he may have for many years.  e structured settlement will guarantee this child over two and a half times the amount of money ini- tially placed into the structure.
We, as attorneys, should keep in mind that the process for  nalizing a structured settlement is di erent than a cash settlement. Care must be taken to avoid constructive receipt so that the growth inside the struc- tured settlement remains tax-free to the injured client. Under no circum- stances should any settlement funds be deposited into your  rm’s trust account if your client has elected to structure those funds. Additionally, speci c language should be included in the release (and minors’ order) if a structure option is chosen. A struc- tured settlement expert will have the appropriate language and documents available for distribution.
In many instances, clients are un- aware that they may have the option to structure funds for the future.  is is, in part, because plainti  attorneys may simply be uneducated as to the process and may underestimate the
potential advantages to their clients. In the 2001 case, Grillo v. Pettiete, a trial attorney and guardian ad litem were forced to pay a settlement in excess of $4 million in a legal mal- practice case when they failed to ad- equately consider and advise their cli- ent of a structured settlement.
Due to the current low interest rate environment of U.S. Treasuries, struc- tured settlements are currently evolv- ing to address a wider range of needs. New market-based options may o er an increased opportunity for tax-free growth and market-related returns. Other options can increase payments every year depending on the perfor- mance of a market index such as the S&P500. Additionally, in the event of an emergency, certain structured settlement options allow for a hard- ship provision that commutes partial future payments into an immediate lump sum while preserving payment rights.
Structured settlements have been widely used and supported for more than three decades. Congress recog- nized the importance of compensat- ing injury victims and has enacted legislation to protect structured set- tlements and payee’s payment rights. Structured settlements have been endorsed by many organizations in- cluding the American Association of People with Disabilities, National Consumers League, and former presi- dents of the ABA.
While structured settlements may not be appropriate in every case, it is important to educate ourselves as attorneys and advocates whose oath requires us to act in the best interest of our clients. It is our responsibility to discuss all settlement options and give our clients the best opportunity for post settlement success.
Lindsay Tygart started her practice in 2006, currently heading the medical malpractice division at Coker Law in Jacksonville. She does extensive pro bono work and has served on the board for multiple legal organizations. She’s been selected as a Rising Star or Super Lawyer every year since 2010.
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