Stretching Settlement Dollars after a Catastrophic Injury

Stretching Settlement Dollars after a Catastrophic Injury…When tragedy strikes, you need someone on your side to help you ensure the long-term well-being of your family. Someone who can help you accurately assess the options, fight for the most advantageous outcome, and manage the process. This is exactly what Jack needed when, at 28 years old, he sustained a serious injury while operating a crane and was left paralyzed from the waist down.

Jack was working at a local retailer to pay for his college courses and helping to care for his aging parents when the accident happened.

After two years in The Hospital for Special Care, Jack was finally able to go home. But that was only the beginning of his battle. He was now confined to a wheelchair for the rest of his life, was in constant pain, routinely required heavy medication, and retained only moderate use of his right hand. Unfortunately, Jack had been left-handed, so he also needed to re-learn the simplest tasks – including writing – all over again from scratch.

He now required daily assistance with the activities of daily living and needed the help of skilled nurses with specialized training to manage his particular injuries.

The pending settlement would give him a net sum of $5 million, and the defense was pushing for:

  1. A payment structure that would provide Jack with $500,000 outright
  2. A monthly payout of approximately $12,000
  3. The ability to place $1.5 million in a Medicare Set-Aside (MSA) to cover future medical expenses
Problem with the Structure

The problem with this proposed structure was that it was not designed to meet Jack’s immediate financial needs or his future goals. For instance, Jack wanted to purchase a home for his elderly parents who were struggling under heavy debt. He also wanted to provide some support to his sister, particularly in the event of his death.

If he accepted the terms of the payout as defined by the defense, the monthly payments would not cover even his medical expenses, which totaled approximately $14,000 per month. Jack would be left without any independence or ability to help provide for his family.

Best way to maximize the settlement

To help Jack maximize the value of the settlement over the long term, we determined that Jack would be better off receiving the full settlement up front. This way, he could:


  1. Use income from the principle to cover the cost of his care over a five-year period, then
  2. Use an asset-protection trust to gift some money to his parents and sisters.
  3. Fund a Special Needs Trust (SNT) so he could protect his settlement money and be eligible for Medicaid benefits to help cover the extensive costs associated with his care


Our counter proposal of procuring the net payment up front would mean that we

  • Could retain the MSA funds for the nurses
  • Use Medicaid for the aides
  • Invest the money
  • Net Jack $18,000 - $20,000 per month 


This arrangement not only provided Jack with far more income on a month-to-month basis, it also ensured that the money would last longer.

Why the original payout wouldn’t work

In the original payout scenario of $500,000 plus approximately $12,000 for life, Jack would have had a deficit each month because his expenses exceeded his income. When he died, the funds would have been completely depleted.

In the revised scenario, we were able to increase Jack’s monthly revenue to enable his independence and increase his comfort while also ensuring that there would be residual money available for his sister upon his passing. This arrangement afforded Jack much greater care as well as peace of mind.

Finally, by having the Czepiga Daly Pope & Perri team administer the trust, Jack could rest easy knowing that our professionals were handling all the details including maximizing the investment, purchasing and managing his home (including snow removal, lawn care, maintenance, etc.), paying caregivers, filing taxes, and making sure that his quality of life was the best it could be.

The Czepiga Daly Pope & Perri team provided value by giving Jack multiple options for consideration and guiding him through a thorough exploration of the benefits and detriments of each solution scenario. This process and the eventual outcome provided Jack with much-needed flexibility and control as he worked to put his life back together while healing after his injury.

As Jack made his well-informed decisions, Czepiga Daly Pope & Perri team formulated the corresponding care plan based on a solid financial foundation and were able to provide security for Jack and his loved ones.

If you need help stretching settlement dollars, contact us today.

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