Tax Considerations in Personal Injury Settlements
Lane Powell Attorney Jeremy Babener authored a June 3 Special Needs Alliance (“SNA”) blog post titled “Tax Considerations in Personal Injury Settlements.” The SNA is a national, not for profit organization of attorneys dedicated to the practice of disability and public benefits law. In the blog post, Babener summarized a presentation on tax issues in personal injury cases that he made at the Society of Settlement Planners Annual Meeting in Las Vegas on May 6. Babener highlighted points that advisors to claimants sometimes miss when drafting settlement agreements and considering the impact of a lump sum versus a structured settlement.
Personal injury claimants have many things to think about before settling a case. It often makes sense for claimants to prioritize non-tax over tax objectives (e.g., maintaining government benefits or avoiding premature dissipation). However, claimants should understand the tax consequences of their choices, and their advisors should ensure that they obtain any tax benefits that are available to them in light of their ultimate decisions.
Read the blog post.