Lexington has a rich historical past and a strong sense of community, but it is also a city where accidents happen or disagreements arise, and a settlement offer may occur. A settlement offer is an offer to settle a claim without going through a legal trial. Settlement offers are common in insurance and legal claims.
You may want to accept a settlement offer immediately, but accepting it too quickly can bind you to terms that do not consider your future needs. This is why speaking with a Lexington injury attorney can help you ask the right questions that protect your rights, interests, and well-being long term before you sign your name on the dotted line.
- What Does The Settlement Entail?
One of the first questions you should ask before accepting any settlement offer is what is included in the initial offer. Many offer only allocations for certain costs, like medical expenses or property damages, and do not account for lost wages or possible future expenses.
You should ask whether the settlement will consider continuing medical treatment, therapy, or other needs that may arise in the future. You will want to get this in writing. Typically, verbal assurances are lost, twisted, or disputed, and only written terms will have legal weight.
- How Was The Settlement Number Arrived At?
Assessing the math behind the offer will help you assess whether the amount is fair to you. Was the settlement amount based on medical reports, repair receipts, or other documents? Did those medical reports, receipts, and/or documents include all relevant details?
Sometimes, insurers and the other party may likely fail to include or value specific losses, especially in terms of non-economic damages like pain and suffering. Requesting a breakdown of how each assessment was made helps clarify everything. Once you understand the rationale, you’ll more readily identify what’s missing and be able to negotiate to achieve a better outcome.
- Will Accepting the Offer Prevent Me from Pursuing Additional Compensation Later?
Typically, settlements require the signing of a release. The release will often indicate that once you accept the settlement funds, you cannot make further claims connected to that incident. Once settled, it matters not if you also add aggravation of injuries or unforeseen costs in the future.
It’s worthwhile to consider what rights or claims you are giving up. A lump-sum payment may seem like instant relief, but if your future needs surpass, you won’t have any legal right to pursue additional compensation.
- All My Legal and Tax Concerns Been Addressed?
Settlements can create legal and tax problems, depending on what the amount compensates for. The IRS may consider it important to note that compensation for a physical injury is not taxable. Still, amounts for other damages, such as emotional distress and wages, may usually be taxable.
You should also assess if accepting the offer could impact any other legal matters. If you need to sign off on an offer, it’s a good idea to consult legal and tax professionals to avoid surprise problems when the settlement cheque does arrive.
- Are There Liens and Deductions That I Should Be Aware Of?
You should know what your actual take-home amount is. Medical providers, insurance companies, and even government programs like Medicare may have a legal right of reimbursement from your settlement.
Liens can drastically take a portion of what you receive. Before you agree, it may be a good idea to confirm all potential deductions are clear before you are blindsided when the final payment applies.
Bottom Line
- Always ask what the settlement covers, including loss of activities and ongoing needs.
- Ask how the settlement offer was calculated.
- Understand if acceptance of the offer is the end of any future claims.
- Consider your legal and tax implications before accepting an offer.
- Confirm any liens and deductions.
- Make sure the settlement offer reflects the overall impact on your life.
