Is Your Personal Injury Settlement Money Yours to Keep?

The amounts cited in news headlines about personal injury cases sound like more money than you can dream of, so what do lawyers mean when they say that no one ever gets rich off of a personal injury case? How can you not be rich when the court just awarded you millions of dollars? Personal injury compensation amounts vary from one case to another, but their purpose is to reimburse the injured plaintiff for the financial losses he or she suffered due to the defendant’s negligence. That cool million that the court awarded a plaintiff who suffered catastrophic injuries represents all the money the plaintiff would have earned between now and retirement if she had not gotten injured. A lot of the money that plaintiffs receive in personal injury cases disappears quickly, paying off long overdue medical bills. Although personal injury settlements protect plaintiffs from becoming destitute, it is possible not to be able to afford to splurge any of your settlement money. To divest yourself of delusions that a personal injury lawsuit will make you wealthy, contact a Fort Lauderdale personal injury attorney.

Is Personal Injury Settlement Money Taxable Income?

The good news is that the money the defendant pays you as a personal injury settlement or damages award is not taxable income; you do not have to pay federal or state taxes on it. If the defendant pays you the money as a lump sum, it is a good idea to keep it in a savings account, where it will accrue interest. This is the closest you will ever come to getting rich from personal injury settlement money. Interest on savings is taxable above a certain level, so if you got a large settlement and invested it in a savings account, you might have to pay taxes on the interest.

Is a Personal Injury Settlement Marital Property?

If a married person gets a settlement or damages award in a personal injury case, the money is the plaintiff’s separate property. This means that the plaintiff does not have to give part of the settlement money to his or her ex-spouse if the couple gets a divorce. If you get divorced, the court will consider your separate property, including your personal injury settlement, when calculating alimony or child support.

How Much of Your Settlement Money Does Your Lawyer Get to Take?

A settlement or damages award in a personal injury case is meant to cover all your financial losses arising from the injury, including your legal fees. Therefore, when you and your lawyer discuss the amount that you should request, the amount will include the money that you will pay your lawyer. Some personal injury attorneys charge fees on a contingency basis, which means that the client pays the lawyer a pre-determined amount, based on the amount of damages requested, after the plaintiff gets a settlement or after the defendant pays the plaintiff damages pursuant to a court order.

Set Up a Consultation Today

A personal injury lawyer can help you if you got injured in a preventable accident and are struggling financially.  Contact Boone & Davis in Fort Lauderdale, Florida or call 954-566-9919 to explore your potential recovery options today.