The value of your assets could be impacted following a personal injury award. It’s important to understand ways your estate may be impacted despite the immense benefit an award may be to an accident victim.
Gathering Financial Documentation
Financial loss is a given following a personal injury. A settlement following an injury can help to recoup some of those. If a victim has endured damaging injuries, a victim can receive a settlement in the amount of hundreds of thousands of dollars. As a result, an individual’s assets and income can be impacted in a major way. Documents such as estate planning paperwork and wills may be necessary to update in the event of a personal injury settlement to reflect their current financial standing.
It is important to be thoughtful about over reporting assets. Higher federal estate taxes could be incurred if expenses are not precisely recognized as the estate may be assessed at a higher value.
Estate Planning and Taxes
It is important that you have knowledge around the laws in your state. Some states do not have fixed taxes and some, charge no property tax at all. Depending on where you live, you could have to pay both federal and state taxes. It may be necessary to change estate plans to be in accordance with federal regulations following receipt of a settlement. While there is a set limit for tax exemptions, they can be applicable for some federal estate taxes.
Developing an Investment Plan
Investing your money in a safe fund may require the help of an expert after receiving a settlement. An expert can help to keep settlement money secured from fees and taxes that are unnecessary while ensuring that you are able to pay for your current expenses.
Thanks to our friends and contributors from Yee Law Group for their insight into estate planning after a personal injury award.