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    Settlements

           Most personal injury settlements involve a payment by an insurance company to the plaintiff in exchange for the plaintiff signing a release for the claim. This basically involves the insurance company sending Foran & Foran, P.A. a check for the agreed upon settlement. The settlement check most likely will be made payable to Foran & Foran, P.A. and the client. The client thereafter endorses the check as does Foran & Foran, P.A. and the check is deposited in the firm Client Escrow Account which is a required account by the ethics rules binding on all attorneys. It usually takes five working days for the check to clear the bank.

           No disbursements can be made from the settlement check until it does clear the bank because of co-mingling violations that would occur. Also, either prior thereto or at the time of endorsing the check, the client will also sign a statement of account which authorizes Foran & Foran, P.A. to make certain disbursements from the proceeds of the check. The fees earned by Foran & Foran, P.A. come from the gross proceeds of the check. Thereafter, the firm is reimbursed for all costs incurred during the processing of the claim. Medical bill balances and any liens must also be paid and the client recovers the balance thereafter as their net recovery.

    Structured Settlements

           There are cases that merit what is known as a structured settlement. A structured settlement is an agreement to settle a claim where the claimant accepts a combination of specified future periodic payments as well as cash at the time of settlement. Structured settlements can help provide peace of mind about financial security and greatly reduce the potential for dissipation of settlement proceeds. Because of the built in protections they offer, structured settlements can help protect claimants from bad financial or investment judgments, bad advice, bad habits, bad company or just plain bad luck. They can certainly assist the claimant from mismanagement of a large lump sum at the time of settlement and from outside sources, relatives or supposed friends from attempting to invade the assets for whatever purpose.

           Under current tax law, the period payments are excluded from gross income pursuant to the Internal Revenue Code. These vehicles are funded with fixed annuities contracts with very low risk as the payments are guaranteed by some of the largest insurance companies in the nation. If a structured settlement option is selected, the payments do not fluctuate because of any interest rate change. A structured settlement can be tailored and structured to accommodate the specific needs of a client whether the payments are made for a limited time period, over a lifetime, with future lump sum options or virtually any other way a client may require. They can also include cost of living adjustments. There are no ongoing management fees and even heirs can be protected if that meets the needs of the client.

           The internal rate of return on a structured settlement is most often higher than the normal rate of return for a low risk investment, especially since the payments are not taxable. A claim where a structured settlement is used requires the services of an experienced personal injury attorney or lawyer. Foran & Foran, P.A. has a lot of experience using structured settlements and has access to brokers who specialize in these type of products. The routine accident case or any case where the client desires to receive all his or her net proceeds in cash are not generally good cases for which to use a structured settlement. In larger cases or where there might be a specific need for a structured settlement, you should make sure your attorney understands the possibilities and consequences of a structured settlement proposal.

    Liens

           Often there are liens against any personal injury claim that need to be reimbursed to the lienholder. There are provisions under state law that allow hospitals to create a lien for the value of their services rendered to an accident victim. If worker's compensation benefits have been paid to a claimant who was injured in an automobile accident while on the job, the worker's compensation carrier is entitled to collect back a certain portion of the benefits paid depending on the jurisdiction where the accident occurred. Often medical providers require patients to sign an authorization and assignment obligating the attorney to pay the providers outstanding balance out of the recovery in any case. These medical authorizations and assignments become both a legal and ethical obligation on the part of the attorney representing the plaintiff, particularly if the attorney has also signed off on an authorization and assignment. Clients often become upset when they do not get their PIP benefits because the amounts received are required to be paid to the doctors. Unfortunately, this puts the attorney in the middle because he/she wants to help the client but is duty bound to pay the medical provider in the event an authorization and assignment has been signed.

           Medicare liens present special problems in accident cases. Medicare has what is known as a super lien. Anyone, including the attorney, who is aware of a Medicare lien remains personally responsible for the repayment of the lien, which could include interest and penalties. Unfortunately, because of the institutional inertia of the Federal government in responding to lien inquires, obtaining lien payoff numbers from the Federal government can take several months, if not longer. This becomes frustrating to the client and the attorney involved but cannot be avoided. There are civil penalties for any person, including the attorney, who does not pay the lien to the government on a timely basis.

           State Medicaid liens are a little less problematical although still very serious issues to consider. Often, the State Medicaid lien can be determined much faster than a Medicare lien. Moreover, it may be somewhat easier to negotiate a State Medicaid lien since the attorney often has one individual with whom they can discuss the lien at the State level.

           Private health insurance policies virtually always contain a provision whereby the insured is required to repay the insurance carrier for any health insurance benefits paid on behalf of the insured which result from an accident where another person is at fault. This is a contractual obligation between the insured and his/her insurance company. The health insurance carrier may require the insured to sign a statement approving of the repayment of the lien out of any settlement. Frequently, the attorney is also asked to sign such a statement. If signed, this lien acknowledgement becomes a binding commitment whereby the attorney cannot avoid paying the lien without serious ethical and legal repercussions. Often, the experienced accident attorney can obtain a reduction in the lien amount or negotiate a compromise under certain circumstances. E.R.I.S.A. based health insurance policies become more difficult to negotiate because of certain Federal laws and policy language. In any event, the experienced personal injury lawyer can sometimes save a client substantial sums of money by proper negotiation techniques, a complete understanding of the law and a knowledge of policy language.

    The legal information on this site is not intended to be legal advice.  Contact one of our experienced personal injury attorneys or lawyers today to get specific information and answers for your specific situation. 

     

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