A construction worker falls from a scaffold in Brooklyn. The injury is severe, life-altering. After the initial shock, his family’s attention turns to the legal claim. They are focused, rightly so, on proving negligence and securing compensation for his medical care and lost income. But in my office, we start from a different place. We ask a question the family has not yet considered: once you win, what is your plan for the money?
A personal injury settlement is not a lottery ticket. It is a recovery—an attempt to make a person whole after a profound loss. The funds are meant to replace decades of lost wages, cover a lifetime of medical needs, and compensate for pain that does not fade. To treat it as a simple windfall is to misunderstand its purpose. The real work begins after the settlement check is cut. Our goal is to convert that recovery into a durable financial foundation for the family. It requires a deliberate plan. Stewardship.
Structuring the Award for Lasting Protection
Receiving a large, lump-sum settlement can expose a family to significant risks. The funds can be targeted by creditors, lost in a future divorce, or mismanaged by beneficiaries who lack financial experience. The first conversation I have with a family in this position is about structure. Often, the most prudent vehicle for managing these assets is a trust.
The type of trust depends entirely on the family’s circumstances. For an individual who may need to qualify for government benefits like Medicaid, a Supplemental Needs Trust (SNT) is essential. It allows the settlement funds to be used for the beneficiary’s quality of life without disqualifying them from necessary public assistance. For others, an irrevocable asset protection trust can shield the funds from future claims and ensure they are preserved for specific purposes—like a child’s education or a spouse’s long-term care.
Placing a settlement into a trust is not about hiding money. It is an act of intentional planning. It appoints a trustee—a person or institution with a fiduciary duty to manage the assets responsibly—and sets clear rules for how the money can be used. This framework provides discipline and professional oversight, transforming a one-time payment into a generational asset.
When a Claim Outlives the Claimant
The most tragic cases are those where the injured person does not survive. In these situations, the legal claim continues, but it splits into two distinct parts under New York law: a survival action and a wrongful death action. Understanding the difference is critical for any family facing this loss.
A survival action is brought by the estate to recover for the decedent’s own conscious pain and suffering before death. These funds belong to the estate and are distributed according to the decedent’s will or, if there is no will, the laws of intestacy. Without a plan, these assets are subject to the delays and costs of Surrogate’s Court and the claims of the estate’s creditors.
A wrongful death action, however, is different. It is brought on behalf of the surviving family members for their own losses—the loss of financial support, services, and parental guidance. Under New York’s Estates, Powers and Trusts Law § 5-4.1, this claim belongs to the “distributees,” typically the spouse and children. These funds are not for the decedent; they are for the family left behind. A well-drafted estate plan anticipates this and can direct how these potential assets should be managed, often through trusts established for the surviving spouse or minor children.
Foundational Rules That Determine the Asset
The outcome of a personal injury claim is governed by foundational legal principles. The first is the statute of limitations. In most New York negligence cases, a claim must be filed within three years of the date of injury. Waiting too long extinguishes the right to recover.
The second principle is pure comparative negligence. This rule means a court can find both parties to be at fault. If you are found to be 20% responsible for your own injury, your final award will be reduced by 20%. This directly impacts the size of the asset we will ultimately need to protect. It is a mathematical reality that must be factored into any long-term financial projection.
While my firm focuses on estate planning and asset protection, we frequently work alongside a family’s personal injury counsel. They focus on establishing liability and maximizing the recovery. We focus on what comes next—ensuring that recovery fulfills its purpose and serves the family for decades to come.
If you or a family member anticipates a significant settlement from a personal injury claim, the planning should begin now, not after the money is in the bank. We can start with a confidential review of how a potential award could be structured to protect your family’s future and become a lasting part of your legacy.
