Nevada’s negligence laws exist to compensate you fairly when you’re hurt because of the actions of someone else. Of course, a personal injury accident causes physical injuries and anguish, but it can also be financially stressful. You may be unable to work while your bills continue to mount.
When your injury settlement arrives, it can be a big help and relief. But you want to make sure that you do the right things with your compensation. Your settlement doesn’t come with instructions, so you may want to speak with your personal injury attorney about the best way to use your compensation. Here’s how to know what to do with your injury settlement money.
Understand and Address the Tax Implications
Your personal injury settlement may be tax-free. On the other hand, it may all be taxed. Sometimes, part of your settlement is tax-free, and some of it is taxed. Whether your compensation is a little or a lot, you need to understand and address the tax implications of your settlement.
Once you know what you need to pay in taxes, you need to set that amount aside. It might be best to send in the expected tax payment right away. You might want to leave the amount in savings until it’s tax time. In any event, you need to start by making sure you’ve got your tax liability paid. Once you’ve addressed taxes, you can begin making a plan for the rest of your settlement funds.
Take a Deep Breath and Wait
You don’t have to decide what to do the first day you receive your settlement. When you make careful decisions, you’re likely to make better decisions. Give yourself the time to evaluate all of your options before you decide how to proceed. Place your funds in a savings or checking account until you make a decision.
Create a Plan
Creating a plan for your settlement funds is essential. Without a plan, you might spend your settlement funds faster than you really want to. It’s important to look at your settlement as a tool that can help you and your family. Carefully create a plan to make sure that your settlement money works for you.
When you’re deciding what to do with your settlement funds, it’s important to think about how long you need your settlement funds to last. If you have lifelong injuries, your money needs to last a lifetime. You should strategize based on your injuries, your personal and family goals, and based on what you need and want your money to do for you in the long term.
Take Care of Your Financial Musts
Now it’s time to start using your cash. The first thing to do is take care of your financial musts. You must have a roof over your head. That doesn’t mean to buy a bigger house, but it does mean to take care of the rent. You should make sure that bills for daily living expenses are up to date. You should also take care of your medical bills.
Consider Income-Producing Assets
If you need your settlement to last a lifetime, you might wonder how to make that happen. There are a few types of investments that can help. An annuity is an investment that allows you to make a lump-sum payment in return for a monthly check for a specified period of time.
Another investment called a CD pays a flat interest rate for the term of the CD. In addition to these guaranteed-income options, you might pursue money market funds, stocks, bonds, and investment properties. Income-producing assets can help your settlement fund to grow.
Pay Off Debts
In addition to investments, a way to become more financially sound is to pay off debts. You might pay off credit card debts or even the mortgage on your home. Living debt free can give you more disposable income for the things that you need and want.
Most personal injury settlements require the victim to agree to release future claims against the responsible party. That means that if your injuries get worse in the future, you’re going to need to cover the expenses yourself. Life insurance can be a valuable tool to ensure that your family is taken care of in any circumstance.
You can use your settlement to get additional education. You might pursue an education that allows you to train for a new career. You might be able to increase your income and find a new profession that you enjoy.
Before you begin any educational pursuit, be sure to do your research. Study the career outlook for the program that you’re considering. Making sure that your program is going to provide the return you’re looking for can help you ensure that your education is a sound investment with your personal injury settlement.
Create Your Will and Trust
When you receive an injury settlement, you need a will and trust. A will and trust can make sure that your interests are represented, and your family is protected. There may be advantages to using a trust, and your attorney can help you understand the best options.
Consider Working With a Financial Professional
A financial professional can help you determine the best investment plan for your settlement. They can help you evaluate your risk tolerance and your needs to determine the best course of action. Having someone on your side who is experienced with lump-sum funds or monthly payments can help you understand how to use your settlement to your advantage.
How an Attorney Can Help
If you’re hurt in an injury accident, receiving a fair settlement is a great start. But you also need to ensure that you make your money work for you. Your attorney can help you structure your settlement in a way that minimizes tax liabilities.
They can also help you understand the tax consequences of your settlement. At each turn, your attorney can help you understand the best course of action to make the most of your personal injury claim.