Debbie A Settlement Protection Trust is a useful asset management tool for accident victims. This trust helps accident victims to manage their recovery and maintain it for life. Its benefits include pre-determined distribution schedules, tax-free payments, and liquidity. If you are considering using one, it is important to know when it makes sense.
Tax-free payments
There are some situations when you may want to use a settlement protection trust. A major reason to use one is to help your beneficiary meet ongoing expenses. These expenses can range from nursing care to prescriptions to rent and mortgage payments. They can even include insurance premiums, housekeeping services, and property taxes. In such cases, a settlement protection trust can provide you with tax-free payments.
A Settlement Protection Trust can be used for a number of different purposes, and it can help you meet your tax goals. For example, if you have a child in college, a Settlement Preservation Trust can provide a tax-free college payment. Another good reason to use a Settlement Preservation Trust is that you don’t have to involve a Defendant or insurer to create one. Furthermore, you can fund the trust with any kind of funding. If you are paying yourself out of a settlement, you can also feed it with payments from a structured settlement annuity.
Another benefit of a Settlement Protection Trust is that it can be irrevocable, which protects the assets from being squandered. Furthermore, the injured party may have the power to dispose of the assets that are in the trust, which gives them the opportunity to change the distribution of their assets. A Settlement Protection Trust can be important in personal injury settlements, particularly when federal and state estate taxes come into play.
Liquidity
A settlement protection trust, or SPT, offers flexibility and controlled liquidity after a settlement is reached. It is ideal for plaintiffs who have uncertain needs in the future. SPT payments cannot be sold to settlement discounters and beneficiaries can qualify for Medicaid or Supplemental Security Income, among other benefits. In addition, SPTs provide additional income for a beneficiary during times of increased need.
Flexibility
A Settlement Protection Trust is a great way to protect your assets after divorce. It can protect you from your ex-spouse’s unintended behavior and can also provide you with maximum flexibility and money management. You can also receive structured settlement annuity payments from the trust and have your money professionally managed by an expert money manager.
A Settlement Protection Trust can be set up as a standalone trust or a pooled trust. A pooled trust will likely have lower fees, and is a simple process to join. Using a Settlement Protection Trust is a great way to protect your settlement assets and prevent them from being wasted.
A settlement protection trust also provides important protection for your family members, including those who are prone to mismanagement and foolish spending. The trust can be paired with structured settlements or other annuity pay-outs to protect these assets from spending by family members.
