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Started By
Message
Personal Injury Settlement
Posted on 10/12/16 at 10:18 am
Posted on 10/12/16 at 10:18 am
Will be coming into a decent chunk of money shortly (100k-200k) in regards to a personal injury settlement for my daughter, wife and myself. Do I have to pay income taxes or any other kind of tax on a personal injury settlement?
Thanks
ETA:
We want to be smart with this money because my daughter (5) may have some long term physical (severe scarring) and emotional issues. Our plan is put about 20-30k in an online savings account and invest the rest. Any other thoughts or advice?
Thanks
ETA:
We want to be smart with this money because my daughter (5) may have some long term physical (severe scarring) and emotional issues. Our plan is put about 20-30k in an online savings account and invest the rest. Any other thoughts or advice?
This post was edited on 10/12/16 at 10:31 am
9
Posted on 10/12/16 at 10:18 am to ThatsAFactJack
No taxes under most circumstances.
This post was edited on 10/12/16 at 10:21 am
Posted on 10/12/16 at 10:36 am to ThatsAFactJack
Not income. It is compensation for injury. However, if settlement has a lost wage component, that is taxable.
Posted on 10/12/16 at 10:44 am to ThatsAFactJack
You will have a minor's settlement that will be submitted to the court for approval. It will contain certain strictures for the preservation of funds
Posted on 10/12/16 at 10:56 am to ThatsAFactJack
I would imagine they would split this up into settlements for each of you.
Posted on 10/12/16 at 11:14 am to Rantavious
quote:
Rantavious
quote:
lost wage component
There is a small lost wage component with my wife and I. But in the big picture it is a small part of the settlement.
Thank you for mentioning that because I had not thought of the lost wages portion.
Posted on 10/12/16 at 11:15 am to Rantavious
quote:
Rantavious
quote:
submitted to the court for approval
Why would I need the court's approval for the settlement of my minor child? Attorney is a family friend and never mentioned anything of court approval for my daughter's settlement.
Posted on 10/12/16 at 11:17 am to LSUFanHouston
quote:
LSUFanHouston
quote:
I would imagine they would split this up into settlements for each of you.
Yes I should have explained it better. According to my attorney we technically have 5 claims. 3 individual personal injury claims (daughter, wife, myself) and 2 Bergeron Claims (wife, myself) because we witnessed traumatic event of a family member.
The total settlement after attorney fees and expenses (medical bills, etc) will net us 100k-200k. I just assumed it would be a lump sum payment and not 5 individual payments.
Posted on 10/12/16 at 11:19 am to ThatsAFactJack
Posted on 10/12/16 at 11:24 am to ThatsAFactJack
quote:
because my daughter (5) may have some long term physical (severe scarring) and emotional issues.
Really sorry to hear
Posted on 10/12/16 at 11:27 am to BigErn
quote:
BigErn
quote:
Really sorry to hear
Thank you. [i]Removedi]
[i]Removedi]
ETA: If it was a perfect world, I would not be dealing with any sort of settlement and my daughter would not have had to go thru this along with my wife and I. I am by no means "well off" but would give up the settlement money in a heartbeat.
This post was edited on 10/12/16 at 12:07 pm
Posted on 10/12/16 at 11:31 am to ThatsAFactJack
I've got 3 girls, and my oldest is 5. Can't even imagine. Prayers for y'all
Posted on 10/12/16 at 11:42 am to ThatsAFactJack
Even without suit, the insurance company will typically associate local counsel to prepare minor's settlement for court approval for funds in excess of 10k. Or opposing counsel will prepare if suit filed. Small matter really. It is for the protection of the minor's funds
Posted on 10/12/16 at 11:44 am to ThatsAFactJack
Your attorney hasn't said anything because the matter is not settled yet.
Posted on 10/12/16 at 11:56 am to ThatsAFactJack
Just make sure the settlement documents define the personal injury component as non-taxable otherwise you could get a 1099 on the whole amount
Posted on 10/12/16 at 12:00 pm to ThatsAFactJack
quote:
Without giving too many details because it is not technically settled yet.
STOP talking about this, refer any questions to your attorney
This post was edited on 10/12/16 at 12:06 pm
Posted on 10/12/16 at 12:17 pm to Tigerpaw123
quote:
Tigerpaw123
quote:
STOP talking about this, refer any questions to your attorney
Removed that from the post. I understand your point about refer questions to attorney. however, the Money Board has a wealth of knowledge and it never hurts to bounce stuff around.
Posted on 10/12/16 at 6:37 pm to ThatsAFactJack
You might want to look into a Structured Settlement. Talk to your lawyer or even the insurance company.
Posted on 10/12/16 at 7:43 pm to ThatsAFactJack
I was involved with a PI settlement as a minor and it had to be approved by a judge. One of the judge's stipulations was that the money be put in some sort of government insured account. This was 25 years ago in LA.
Posted on 10/13/16 at 8:38 am to MikeBRLA
quote:
MikeBRLA
quote:
One of the judge's stipulations was that the money be put in some sort of government insured account.
I sure as hell hope that's not the case anymore. Sad that the government can't get out our damn way.
ETA: I have no problem putting my daughters settlement in a trust. I do have a problem if it is required to be a government insured account.
This post was edited on 10/13/16 at 10:11 am
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