If you’ve been injured and successfully filed a personal injury lawsuit or won a class action lawsuit against an employer, there might be a large sum of money coming your way. Rather than being handed over the award outright, may choose to put their settlements into a support trust. There are many advantages of putting your settlement into a support trust such as:
Asset Protection: Many people are not able to successfully handle their finances and make them stretch long term. In fact, the average length that a personal injury settlement last is 3-5 years a lot less than what people expect when they are receiving funds for future income loss. A settlement protection trust prevents the assets from being used foolishly and protects the income from being seized by creditors and divorce.
However, the only drawback is that the beneficiary will not have direct access to the money. A third party known as a trustee will be in charge of the trust and make distribution of money to the beneficiary when he or she believes it is necessary. The goal of the trustee is to keep the money safe in the trust as long as possible and make sure the money lasts a lifetime. Common reasons for distribution of funds include buying a home, vehicle, and paying for household and medical bills. The trustee should be a professional meaning that they have a bond from the court. They should have experience in investment management and taxation.