A personal injury settlement is compensation awarded to a person who suffered a personal injury caused by another person or a company. In some instances, the personal injury award can be significant. Also, depending on the agreement, the settlement may be paid out as a lump sum or as a series of separate payments.
Regardless of how it’s paid out, if there will be funds left over after paying for your medical bills, you may wish to consider revising your will. However, there are several issues to consider before making your decision.
It’s not uncommon for a serious personal injury to leave the victim with long term or even permanent disability. The resulting condition can force drastic changes in the person’s life that might include structural changes to their house for easier access to the inability to return to the workforce. Sadly, debilitating injuries can also affect personal relationships– with partners, friends, and family members. This can change your view as to who should inherit your assets after you pass. On the upside, you may have a person or persons who enter your life as a result of your injury and who go to great lengths to care for you. As a result, you may want to include these caregivers in your will.
It is important to talk to a wills and trusts lawyer relies on about updating a will to include personal injury settlement details. An estate planning attorney can review your situation, the terms of your settlement, and your final issues. After careful consideration, your attorney can then provide guidance as to how you may want to construct your will to reflect your final wishes. In addition, you may wish to ask yourself these questions when determining if you should update your will after receiving a personal injury settlement:
- After your injury related costs have been covered by your settlement, do you have a sum of money left over? If so, you may wish to designate heirs for any monies left over after your passing.
- Do you wish to add anyone to your will who you did not name in your current will?
- Do you wish to remove anyone from your will who you had previously named?
- Do you currently have ongoing medical care costs that will cease after your passing? Your settlement award might have been calculated to include costs beyond your life expectancy. In that case, your estate may end up with more assets than you had anticipated.
If you received a personal injury settlement award, you may wish to consider consulting an estate planning attorney about the possibility of revising your will.
Thanks to our friends and contributors from Arizona Estate Planning Attorneys for their insight into estate planning and wills.