Monday, January 27, 2014

Is a Settlement Trust Right for You?

Most people understand that when you are injured in an accident of some kind, you may have legal options for recovering all or part of your costs from someone else. For example, if someone hits you with their car while driving recklessly, there is a good chance that you’ll get a settlement from them -- or more typically from their insurance company, or that you’ll go to court and win an award against them for your damages. However, what exactly that award or settlement looks like in practice is less well understood. Winning an award in court is only part of the process of actually getting reimbursed for your injuries; you still have to collect the money you’re owed. I’ve written before about some of the reasons that some good cases just can’t be “won” in a practical sense because there simply isn’t any option for ultimately collection on your award. In this article I want to talk about some of the reasons why you might not want to take a big check from your defendant, and what you can do instead under certain circumstances.


Put simply an annuity is merely a series of fixed payments stretching into the future. Sometimes defendants who are held liable by the court, or who voluntarily settle a case, just don’t have enough resources to pay you outright. In these situations, a defendant might offer to make payments to you, like payments on a house, until their obligation is “paid off”. There are lots of ways these kinds of structures can be set up, but essentially you get your money in regular chunks; not all at once.


In some situations, your defendant might have enough cash on hand to pay your claim outright, such as an insurance company, but it might be in your best interest to take payments on the award rather than a large lump sum. Sometimes this is because accepting a large one-time payment might have adverse tax consequences. In other circumstances, a plaintiff might not be competent to handle a large lump payment; such as for very young children or disabled victims. In these cases, a trust can be created to handle the assets while still ensuring that the money, or the benefits of the trust, ultimately goes to the intended plaintiff; usually in the form of periodic payments. There are a number of different types of trusts, some of which have wide room to design the specifics to match a given situation, others of which are closely regulated by state or Federal law.

Voluntary Settlement Trusts
In some situations, the successful plaintiff might not want, or be able to, handle a single large payment. Children, for example, probably don’t have the experience or resources necessary to manage several hundred thousand dollars in settlement money. Even for adults, some people just aren’t great at managing their money and would prefer a stress free regular payment instead of the hassle of large asset management choices. In these circumstances, trusts can be created, with professional asset managers, to hold the settlement for the benefit of the injured plaintiff. These trusts are usually managed with an eye towards maximizing their value and the money is often invested at a profit; the trust ultimately becomes worth more than the original settlement. Payment of benefits can be structured in a number of different ways to meet a wide variety of objectives. For example, payments could be made to a child’s guardian until the child reaches 18 (or 21 or 35) at which time the balance of the trust might be paid out in full. Many other options exist.

Special Needs Trust
In some cases, an injured accident victim was previously eligible for public services such as Medicaid or Medicare and doesn’t want to lose that eligibility as a result of coming into a large sum of money. There are a number of legitimate reasons for this concern such as the long-term sustainability of care. Whatever the reason, the law provides for trusts to be created for just this situation. Though such trusts are highly regulated, and the benefits can be paid out only under certain circumstances; the assets of such trusts will not be counted against a person with regard to public benefits eligibility. The one major requirement is that the beneficiary be disabled.

Medicare Set Aside
A variation of the special needs trusts, Medicare Set Asides are designed to help keep an individual eligible for Medicare under certain circumstances. These trusts are complex and governed by an interlocking series of both Federal and State laws, but they are sometimes the best way to preserve settlement resources for certain classes of victims.

You need a lawyer

Trusts are not to be taken lightly. They involve complex financial decisions informed by even more complex legal questions. Done improperly, trusts have the potential to dilute assets dramatically. If you think that a trust of one kind or another might benefit your situation, you absolutely should speak to a qualified attorney about your case before making any final decisions. There are pros and cons to each type of settlement, from a lump-sum payment to a trust arrangement, and you’ll want to make sure that you’re fully informed about all of your options.

Thursday, January 2, 2014

Confessing on Facebook: Social Media Self-Incrimination

Most people know that it’s easy to get in trouble on social media. Maybe you forgot to set your Facebook post to private, or perhaps you bad-mouthed your employer and were suspended. While these kind of indiscretions can be painful, there is an entirely worse way to get yourself in trouble on the internet; self-incrimination for criminal activity. There are any number of extreme examples - like the drug ring in New York that Police couldn’t crack until the group set up a Facebook page under the gang’s name and posted all of their nicknames, real names, and businesses addresses online for everyone to see -- but of more concern to most of you are the simple things you can do to get yourself into legal trouble; often without even realizing you’ve given the police anything of value.

Direct Admissions

The most direct route to legal trouble through social media is the obviously incriminating admission. It should go without saying, but posting something on your social media account stating that you committed, were involved in, knew about, supported, requested, saw, had friends involved with, or were in any way connected to illegal activity can absolutely get you in trouble; and, in case you were wondering, it’s not just text posts that can earn you a police visit. Pictures, videos, particularly videos’, and even likes or faves can all implicate you in a crime.

Associations and Affiliations

Even if you don’t directly admit your role in illegal activity, your friends might. If you are social-media connected with someone, that association can draw you into a criminal investigation; either under some form of criminal association charge (gang charge) or as a potential witness. It is even possible to be convicted for perjury if you tell police or a court that you don’t know someone and it later comes out that you are friends with them on a social account.

The same warnings hold true for possessions and property. Pictures showing you in, near, or in possession of suspect property or items can be just as damning as a direct admission. That picture of you with the stolen car, or of you standing outside the restaurant that was just busted for it’s grow operation can implicate you as a suspect. In fact, sometimes all police need in order to obtain a search warrant for your building is a picture of you hanging out at a suspect location.


Perhaps the most subtle way of incriminating yourself on social media is through the location awareness features of most networks. You might have a great alibi who swears up and down that you were nowhere near the warehouse on the 2nd that night, but if you “checked into” the Starbucks down the street at 9:00 pm, good luck. What’s worse, you might not even know that you’re phone is tracking your location. Some apps have auto check-in features. Google Maps, for example, can be set to share your location with friends automatically. These examples are just the tip of the iceberg. The rapidly evolving nature of social media technology means that you may not even know exactly what your phone or other device is revealing about your location.

But only my friends see my posts, right?

Think your social media activity is private; too obscure for police to notice, protected by your constitutional rights. It might be, but I wouldn’t count on it. There are many ways for investigators to get the information you post. Police might be able to obtain a search warrant to collect the records directly from your social media provider, internet provider, cell service provider, etc. Even without a warrant, they can often simply friend you, under an alias of course, or perhaps just friend one of your friends; and thereby get what they want to know. Maybe your friend caves under interrogation and turns over their account to police who then have access to all of your posts. The list goes on almost forever. The point is, there is absolutely no guarantee that what you post online will remain safe or confidential; in fact, you’re virtually guaranteed that it won’t.

That isn’t a crime…

Even if you don’t think you’ve done anything wrong, be careful about what you say online. In one situation, a girl posted a comment on Twitter about how smashed she was -- not illegal in and of itself -- and later had to face that post in court when she was arrested for a drunk driving accident that occurred less than two hours after she made her drunken post. In other cases, people post things that, while not directly incriminating, may give police enough for a warrant to search the rest of your computer, home, or other property; during which search more substantive incriminating evidence may turn up.

It is always important to watch what you say; especially when your words, photos, videos, and locations may be forever recorded in the digital world.