Choosing a Bank Partner for Recovery Management: Trust, Integrity and Track Record Matter

When you’re in the business of handling the affairs of people with serious, life-altering injuries, that’s sacred territory. Whether your role is litigator, judge, insurer, contractor or care coordinator, the injured person and their family are counting on you to do the right thing for their short- and long-term benefit. They’re not experts in law, healthcare, finance or the tax code, so they’re depending on the professionals to uphold and abide by their oaths, pledges and values.

Negligence contributed to their circumstances. Great care must be taken to prevent further jeopardy and harm by:

• Protecting their settlement
• Preserving public assistance as appropriate
• Minimizing tax liability
• Planning for special needs care
• Providing for future periodic disbursements

It’s especially critical to adhere to the utmost legal and fiduciary standards when the injured person is a minor or an adult whose cognitive capacity is compromised. Therecan be significant consequences when settlement proceeds for a client with special needs are poorly prepared for and allocated.

A high-functioning, multi-disciplinary team of experts must coalesce to optimize the outcome for the injured plaintiff:

• Special needs planning attorney
• Estate planning attorney
• Medicare set-aside specialist
• Lien resolution expert
• CPA
• Financial advisor

Education is Fundamental

Whether the litigation recovery is placed into a trust, guardianship or conservatorship of the estate, blocked account, uniform transfer to minor account, or similar type of arrangement, it’s critical that the client is informed about the options and their advantages and disadvantages.

Look for a financial services firm that is highly experienced in these sensitive matters and accustomed to serving special needs clients, their families and guardians.

Complexity Varies

For a severely injured adult with no permanent disability and without a tricky personal or financial situation, settlement planning can be as simple as a basic estate plan that specifies the disposition of the recovery in the event of death or incapacity of the injured person. If the estate tax would be triggered, that calls for more advanced planning.

For a plaintiff with liens from financial troubles or obligations for child or spousal support, debt management comes into play. Your financial services partner should be adept at discerning the level of complexity and tailoring services accordingly.

Navigating the Public Benefits Landscape

The eligibility requirements for various forms of public assistance can be dizzying. But in the case of a catastrophically injured person, it’s critical to assess carefully the benefits and drawbacks of preserving need-based benefits like supplemental security income, Section 8 Housing supplements and Medicaid. It’s especially important in the case of a minor with deemed resources now who could be eligible when they turn 18, provided recovery plans are put in place to preserve it.

Non-needs-based assistance includes Veterans Administration benefits, Medicare and Social Security Disability Insurance and should be taken into account as well. Trust advisors must be versed in the laws and requirements, federally and at the state level, in order to ensure the injured person is in the optimal position based on their circumstances now and in the future.

Doing the Most

Apart from a few landmark settlements for especially egregious circumstances, recovery is almost always some fraction of the total amount of actual damages. Settlements often do not completely cover the future cost of the client’s needs. Success is defined by doing the absolute most with the amount secured. Your financial services partner should be skilled at strategies for maximizing the lifespan of the settlement proceeds for the benefit of your client.

Fiduciary Standard of Excellence

Back to the oaths we mentioned in the introduction: The financial services professional who acts as fiduciary to the injured plaintiff has a binding legal obligation to act in the beneficiary’s best interest – not their own. Choose a financial services partner who takes seriously this legal duty of stewardship and meets the highest standards of conduct.

 

Ben Hunter leads Pinnacle’s Legal Specialty Group. Visit PNFP.com/Legal to learn more.

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