Cerebral Palsy Lawsuit Settlement: Financial Considerations

FREE CASE EVALUATION

You pay no fees unless we win your case

Yes. Please have an attorney, paralegal, or staff member from Pintas & Mullins law firm or their co-counsel contact me as soon as possible to discuss my questions. They may contact me by email or telephone (including phone calls, text messages, autodialed / auto-selected or pre-recorded calls). I understand that message and data rates may apply and that consent to such contact is not required for use of these services. I also agree to the Privacy Policy, Anti Fraud Policy and online Terms, including its mandatory arbitration provision.
This field is for validation purposes and should be left unchanged.

Birth Injury Lawsuit Settlement Tax Implications

The settlement award for many legal cases (i.e., settlements for unlawful termination, property damage, etc.) is considered taxable income. However, for personal injury settlements like those you receive from a birth injury lawsuit settlement are considered tax free for the recipient. This includes compensation for medical expenses (including travel costs to appointments), injury compensation, and emotional damages.

Settlements for personal physical injuries are excluded from taxation under section 104(a)(2) of the Internal Revenue Code, which states that “gross income does not include … the amount of any damages (other than punitive damages) received…on account of personal physical injuries or physical sickness.”

It’s important to know that while the primary settlement will not be taxed, the interest on it may be. This would be the case if you were to receive a large, lump sum payment and invested it or earned interest on it in an account.

However, in the event you receive a structured settlement (payments made to you over a scheduled period of time) the award is 100% tax fee including any growth on the award you receive from investments.

In addition to taxes owed, you will want to explore any tax deductions or tax credits such as medical expense deductions and child and dependent care credits to which you may be entitled.

It’s important to consult with a tax professional at this time to ensure you are paying any taxes you may owe and receiving any tax deductions or tax credits you deserve.

Investment and Wealth Preservation of Your Cerebral Palsy Settlement

Should you receive a lump sum payment in the form of a large check you’ll want to deposit it in an interest earning account for the short term. This is in lieu of depositing it into a personal checking account until you’ve determined how you’re going to invest it.

It’s important to consult with a financial advisor to decide what type of investment account you want to establish whether you’ve received a lump sum payment or a structured settlement paid out over time. Certain types of investment accounts still allow you access to the money if and when you need it, while still accruing interest.

Government Assistance Programs for those With Cerebral Palsy

There are many government assistance programs and benefits available to individuals with disabilities who meet eligibility criteria. Research these programs to learn how to integrate their benefits into your financial settlement plan. Government assistance programs for which you may qualify include:

  • Children’s Health Insurance Program (CHIP)
  • Individuals with Disabilities Education Act (IDEA)
  • Medicaid
  • Social Security Disability Insurance (SSDI)
  • Supplemental Security Income (SSI)

Additionally, there are many organizations which can offer help, including Cerebral Palsy Foundation (CPF), Children’s Hemiplegia and Stroke Association (CHASA), and the UnitedHealthcare Children’s Foundation (UHCCF).

Get Help from Pintas & Mullins Cerebral Palsy Lawyers

The cerebral palsy lawyers at Pintas & Mullins are dedicated to helping you achieve financial empowerment through effective financial management of your settlement, including helping you establish a special needs trust and a long-term financial plan to care for your child. With decades of experience helping families like yours, we can help ensure your child is cared for for years to come. Call or text 800-934-6555 or complete our Free Case Evaluation form online to get started today.

Main Office

368 W Huron St, Suite 100
Chicago, IL 60654
Open: Mon – Sun 8:30am – 7:00pm

Injured?
Tell Us What Happened.

We are here to ensure that your voice is heard. If you or a loved one was wrongfully injured, we want to hear about it. Contact us today and we’ll review your case for free.

Yes. Please have an attorney, paralegal, or staff member from Pintas & Mullins law firm or their co-counsel contact me as soon as possible to discuss my questions. They may contact me by email or telephone (including phone calls, text messages, autodialed / auto-selected or pre-recorded calls). I understand that message and data rates may apply and that consent to such contact is not required for use of these services. I also agree to the Privacy Policy, Anti Fraud Policy and online Terms, including its mandatory arbitration provision.
This field is for validation purposes and should be left unchanged.