A construction worker falls from a scaffold in Manhattan. After two years of litigation, a seven-figure settlement is finally reached. The family feels a wave of relief—the fight is over. Then, the check arrives, and a different kind of weight sets in. This money has to replace a lifetime of lost income, cover decades of future medical care, and provide for children who now have a disabled parent. It cannot be lost.
In my practice, I have seen the aftermath of these life-altering events. Securing a settlement is the first battle. The second, and arguably more critical, is the stewardship of those funds. A large, unstructured settlement can be exhausted in a few years, leaving a family with nothing. A thoughtfully structured award, however, can provide security for generations.
The Settlement Is Not a Windfall
The first mistake is to view a personal injury settlement as found money. It is not. It is a recovery—a calculated replacement for what was taken from you: your health, your ability to work, your future quality of life. The insurance company’s goal is to close the file for the lowest possible number. Our goal as attorneys is to secure a figure that accurately reflects the client’s total losses, present and future.
Once that figure is secured, the funds become a core family asset. Like any other significant asset, it requires a plan. Without one, the award is vulnerable to mismanagement, creditors, or unforeseen circumstances. The relief of winning a case can quickly turn to anxiety without a deliberate strategy for preserving the capital while ensuring it meets the family’s ongoing needs.
The objective shifts from litigation to conservation. How do we make this money last for a 30, 40, or 50-year horizon? How do we ensure the injured person remains eligible for essential government benefits? The answers lie in legal structures designed for exactly this kind of contingency.
Using Trusts for Long-Term Protection
For many of my clients who have received substantial awards from personal injury claims, a trust is the most effective instrument for asset protection. Placing the settlement into a properly drafted trust insulates it from many risks. It appoints a trustee—a fiduciary who has a legal duty to manage the funds prudently and in the best interest of the beneficiary.
This is especially critical when the injured person may need to rely on means-tested government programs like Medicaid or Supplemental Security Income (SSI). A large cash settlement held in an individual’s name would immediately disqualify them from receiving these benefits. The law, however, provides a specific tool for this situation.
New York Estates, Powers and Trusts Law (EPTL) § 7-1.12 authorizes the creation of a Supplemental Needs Trust (SNT). This specialized trust holds the settlement funds for the benefit of the disabled individual without compromising their eligibility for public assistance. The trust assets are used to pay for expenses that government benefits do not cover—things like specialized medical equipment, home modifications, therapy, or transportation. The SNT becomes a parallel source of funding that enhances the beneficiary’s quality of life without disrupting their core support system.
A Deliberate Plan for a New Future
Creating a trust is the foundational step, but it is part of a much larger conversation about the family’s new financial reality. The settlement doesn’t just affect the injured person; it changes the entire family’s estate plan.
We work with families to integrate the settlement into their broader legacy goals. This often involves:
- Revisiting the Will: Does the existing will reflect how this new asset should be handled upon the beneficiary’s death?
- Appointing a Trustee: Who is best suited to manage these funds? A family member? A corporate trustee? This decision requires careful consideration of expertise, relationships, and the duty of impartiality.
- Generational Planning: Can the remainder of the trust assets, after the primary beneficiary’s needs are met for their lifetime, pass to children or grandchildren in a protected way?
This process is about intentionality. It is about converting a monetary award born from a crisis into a stable, enduring source of security. It is the difference between simply receiving a check and building a true contingency plan for the decades to come.
If you or a loved one is in the process of a personal injury claim, the legal strategy should not end when a settlement number is agreed upon. The conservation of that award is just as important as winning it. The right structure ensures the result of the litigation serves its ultimate purpose—providing lasting care and security for the person who was harmed.
Before you finalize any settlement, it is prudent to understand how the proceeds will be managed. If your family anticipates a significant award, we can schedule a confidential meeting to model the financial and legal structures that will protect those funds for the future.
