A construction worker from Queens falls from a scaffold, and after a long legal battle, he receives a seven-figure settlement. His personal injury attorney did their job brilliantly. The case is closed. But for the family, the most critical work is just beginning—the work of turning that one-time payment into a lifetime of security.
I have seen families receive life-altering sums from a personal injury case, only to see the funds mismanaged, depleted by creditors, or lost to a future divorce. The elation of winning a case quickly gives way to the immense pressure of managing a significant asset. A settlement isn’t just a check. It is the financial replacement for what was lost—a person’s health, their ability to earn a living, their quality of life. It must be treated with intention and foresight.
Stewardship. That is the mindset required. The moment a settlement is finalized, it becomes a core component of your estate. The question is no longer about winning the case, but about building a structure to protect the award for you and for the next generation.
A Settlement Is an Asset That Needs a Shield
Many people who receive a large settlement have never managed that kind of money before. The impulse is often to pay off debt, buy a new home, or make large gifts to family. While understandable, these actions can leave the core settlement fund vulnerable. Without a formal plan, the award is exposed to future lawsuits, creditors, and matrimonial claims.
The first step we take with clients in this situation is to reframe the award not as a windfall, but as a replacement asset. It is the capital that must now generate the income that a person can no longer earn. It must pay for the medical care they will need for the rest of their life. Protecting the principal is paramount.
This is where the disciplines of personal injury law and estate planning intersect. The personal injury lawyer’s job is to secure the maximum possible recovery. Our job is to build the legal fortress around it. This is often done using a trust—a legal entity designed to hold and manage assets on behalf of a beneficiary.
Using Trusts to Preserve Your Award and Your Benefits
The type of trust we use depends entirely on the individual’s circumstances. For an injured person who relies on or may need to rely on means-tested government benefits like Medicaid or Supplemental Security Income (SSI), the structure is critical. Receiving a large settlement directly can immediately disqualify them from these essential programs.
In these cases, we often establish a Supplemental Needs Trust, sometimes called a Special Needs Trust or SNT. Governed by New York’s Estates, Powers and Trusts Law (EPTL) § 7-1.12, this specific type of trust holds the settlement funds. The money in the trust is managed by a trustee—a person or institution you choose—who has a fiduciary duty to act in your best interest. The funds are not paid directly to you. Instead, the trustee pays for goods and services that improve your quality of life but are not covered by public benefits—accessible transportation, home modifications, education, and therapies.
This structure allows the settlement award to enhance your life without jeopardizing the government benefits you rely on for basic medical care and living expenses. For those not on public benefits, other types of irrevocable trusts can provide powerful protection from creditors and ensure the funds are managed prudently over a lifetime.
Planning for a Future You Cannot Predict
A serious personal injury often brings with it the possibility of future incapacity. The accident may have caused cognitive decline or a physical condition that will worsen over time. The settlement must be structured to function even if you can no longer manage your own affairs.
This is why a prudent plan includes a durable Power of Attorney and a Health Care Proxy. These documents appoint people you trust to make financial and medical decisions for you if you become unable to do so. When a trust is in place, the person you name as your trustee is already empowered to manage the settlement funds according to your wishes.
Without these documents, your family would be forced to petition the Surrogate’s Court in your county to have a guardian appointed. That process is public, expensive, and time-consuming. A deliberate plan ensures that the people you choose are in control, not a judge who doesn’t know you or your family. It keeps your private affairs private and ensures the settlement is used exactly as you intended.
The end of a personal injury case is the beginning of a new chapter. The goal is to make it one of security and stability, not uncertainty. The legal victory is only meaningful if the award it produces is managed with diligence and care for the long road ahead.
The first and most prudent step is to consult with an estate planning attorney before the settlement funds are even disbursed. We can work with your personal injury counsel to create the proper structure, allowing the funds to flow directly into a protective trust. To begin that conversation, you can schedule a review of your pending settlement and discuss a plan to secure your family’s future.
