Answering All Your Questions about Personal Injury, Social Security Disability, Complex Litigation, Special Needs Planning, and Probate

When a catastrophic event puts your future at risk, anxiety and uncertainty will cause you to have a million questions. What can you do? How can you provide for your family? Will you recover?

Allow the extensive experience and knowledge of the Packard Law Firm put your worries to rest. Come learn the answers to your questions and see how we can help pull you out of the depths of uncertainty.

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  • Probate FAQ

    What is Probate?

    Probate is the court-involved process that proves the validity of a will, determines the proper heirs of an estate, ensures that creditors are paid from assets of the estate and that heirs receive the estate property to which they are legally entitled.  The probate process often involves standing in front of a judge to become appointed as a personal representative. After which, the assets are gathered and distributed according to instructions of the will or according to state intestacy laws when there is no will.

    Does a valid will avoid probate?

    Wills do not avoid probate. Wills have no legal authority until the willmaker (“testator”) dies, the original will is delivered to the probate court, and a hearing is held to determine the validity of the will.

    What is the difference between an independent and dependent administration?

    If I don’t have a will, who gets my property when I die?

    Have more questions? Contact us today.

  • Special Needs Trusts & ABLE Accounts FAQ

    What is a trust?

    In general, a trust is a relationship in which one person holds title to property, subject to an obligation to keep or use the property for the benefit of another.  A trust divides the legal ownership from the beneficial ownership.

     

    What makes a special needs trust different from other trusts?

    A special needs trust is a trust designed for a beneficiary who is disabled, either physically or mentally. First-party special needs trusts are more restrictive than third-party special needs trusts and must include provisions for a Medicaid payback upon the death of the beneficiary. In both first-party and third-party special needs trusts, the beneficiary cannot serve as trustee and has no control over the trust funds or the trustee. A properly-drafted and properly-administered special needs trust will not count as a resource for most needs-based government programs such as Supplemental Security Income (“SSI”) and Medicaid. However, special needs trusts have very specific language requirements which must be reviewed by the government agencies in order to be determined as a “non-countable resource.”

     

    Why should I leave inheritance to a special needs trust?

    Oftentimes, family members and friends want to give money and other assets to individuals with special needs. This generosity can sometimes actually prevent the individual from qualifying for or maintaining eligibility for essential needs-based government benefits such as SSI and Medicaid. However, funds left to a properly-drafted and properly-administered special needs trust do not count as a resource for most needs-based government programs, and provide a source of support to supplement government benefits and enhance the standard of living for an individual with special needs.

     

    When should a Special Needs Trust be established?

    Ideally, you should create a special needs trust when the beneficiary is young (there is no minimum age for the beneficiary in order to have a special needs trust established for him or her). Having the SNT in place allows for gifts, inheritances and unexpected lawsuit settlements to all be sent to the trust without worrying about jeopardizing eligibility for government benefits. Most families with loved ones with disabilities create a SNT as part of their estate planning process. Generally, a SNT should be established no later than the beneficiary’s 65th birthday.

     

    Who can establish a Special Needs Trust?

    A third-party trust can be established by anyone other than the beneficiary. Typically, a third-party SNT is established by a family member to leave property through his or her estate plan for the beneficiary, but the person creating or giving money to the trust does not have to be related to the beneficiary. A first-party trust must be created by a parent, grandparent, guardian, court, or mentally and legally competent beneficiary. It is important to talk to an experienced special needs planner because a poorly drafted trust can be subject to “invasion” by government agencies. These trusts are complicated documents, but Alison Packard specializes in helping families with loved ones with disabilities and has substantial experience in drafting special needs trusts. She would love to help.

     

    What can a special needs trust pay for?

    A trustee can distribute trust funds to pay for non-food and shelter items, such as clothing, dental care, hair and nail care, cell phones, computers, transportation costs, recreational activities, vacations, hobbies, pets, education expenses, etc.  Special needs trusts can sometimes pay for food and shelter items if the beneficiary does not receive SSI benefits or is willing to receive less money in monthly SSI payments.

     

    Our family is wealthy. Do we still need to create a special needs trust?

    Yes. A special needs trust will protect your loved ones with special needs from potential creditors. For example, if your child with disabilities is sued in a personal injury action, the assets in the trust would not be available to the plaintiffs. Additionally, a special needs trust will allow you to use your money for supplemental purposes for your loved one which will allow them to live a fuller life. Otherwise, you will use most of your money paying for extremely expensive private care benefits.

     

    What is the difference between a Third-Party Trust and a First Party Trust?

    The first major difference is where the funds come from. In a third-party trust, the funds belong to a third party, or anyone other than the beneficiary. In contrast, a first-party trust is funded by assets that the beneficiary owns outright (such as court awards or inheritances given before a third-party trust was established).

     

    The second main difference has to do with what happens to left-over assets in the trust after the beneficiary passes away. First-party trusts are subject to what is called a Medicaid payback provision, meaning any remaining assets in the trust left over after the beneficiary has passed away must first be used to reimburse their state’s Medicaid program up to the amount of the beneficiary’s total lifetime Medicaid payments. This typically drains out the rest of the trust’s assets. In contrast, a third-party trust is not subject to a Medicaid payback provision, so the remaining assets can be distributed to people or charities determined by whoever created the trust. Typically, the remaining assets are given to family members or charities that provided disability services to your loved one with special needs.

     

    What Type of Special Needs Trust is Preferred?

    Under the umbrella of SNTs, there is usually not an option between third and first-party trusts. A third-party trust has more benefits than a first-party SNT, but if a beneficiary receives his or her own money, a first-party SNT must be made to hold those assets. The decision between pooled and non-pooled SNTs depends on the situation of the family or individual looking to create the trust. Many people like a non-pooled trust because it is more individualized to the needs of the beneficiary. Additionally, designating a family member or friend is comforting to some people because they feel they will give them more attention than a professional would. However, some people may not have family members or friends they feel comfortable giving access to the trust, or they might feel more comfortable having an experienced trustee manage the trust. In this case, a bank or financial institution can be designated as the trustee for a non-pooled trust. Yet, non-pooled trusts, especially those managed by a professional trustee, are substantially more expensive than a pooled trust. Thus, pooled trusts may be the best options for many families unable to afford a personalized non-pooled SNT.

     

    What is the difference between a pooled and non-pooled special needs trust?

    A non-pooled, individual special needs trust is established by someone for the benefit of a specific beneficiary who is often a family member. A pooled trust is created by a non-profit organization that pools together assets from multiple beneficiaries, creating sub-accounts within the larger trust. In a pooled trust, assets from one donor or beneficiary may be minimal, but because pooled trusts include contributions from many beneficiaries, the trust is able to make stable investments and provide additional management services that a non-pooled SNT might not be able to afford. This group trust, sometimes known as a community or master trust, is substantially less expensive than a traditional non-pooled special needs trust. However, it is also less individualized to the needs of the beneficiary than a non-pooled trust.

     

    What can an ABLE account be used for?  

    ABLE account funds can pay for “qualified disability expenses” such as, but not limited to, medical treatment, education, transportation and housing for the individual with disabilities. Contributions to an ABLE account are not tax-deductible, but all investment earnings are untaxed if the funds are used for appropriate qualified disability expenses.

     

    How is an ABLE Account different from a Special Needs Trust?

    While both ABLE accounts and special needs trusts (SNT’s) are excluded resources for public benefits determination purposes, there are many differences between an ABLE account and a SNT. Unlike a special needs trust, an ABLE account has no requirement of trustee management, which allows for more independence for your loved one with disabilities. The age requirement is different, as beneficiaries of a first-party SNT must be disabled before 65 years old, and ABLE accounts require the individual to be disabled before the age of 26. Additionally, funds in an ABLE account can be used for food and shelter, while those from a SNT strictly cannot be used for basic living needs such as food and shelter. One of the biggest differences is that ABLE accounts have an annual contribution cap of $15,000 and a total balance limit of $100,000, while SNT’s have no amount limit that can be held in the trust.

     

    Fortunately, SNTs and ABLE accounts are not mutually exclusive. Many people decide to use a third-party SNT to leave hefty amounts of assets for their loved ones with special needs through estate planning according to instructions in the trust, and they use an ABLE account as a secondary tool for protection against losing government benefits due to small gifts or inheritances the beneficiary might accrue during his or her lifetime. For example, if a beneficiary receives a small amount (less than $15,000) of unexpected money, such as a birthday gift misguidedly given directly to the beneficiary instead of a third party SNT, a small litigation settlement, or a lottery prize, the beneficiary can easily put this money in an ABLE account and does not have to worry about jeopardizing his or her benefits or creating a first-party SNT for that one lump sum of money.

     

    When deciding how to best use SNTs and ABLE accounts for an individual with special needs, it is important to consult with a special needs planning attorney about the specificities of your case. Every person or family is different, and the decision for how to use these tools can be complicated. Alison Packard can help you walk through the necessary steps and questions to consider when making this decision.

     

    Have more questions? Contact us today.

  • Estate Planning FAQ

    What does my estate include?

    Your estate is all of the money and property you own. This includes, but is not limited to:

    • Your home and any other real estate you own
    • Investments
    • Retirement Accounts
    • Life Insurance Policies
    • Your share of any joint accounts
    • Trust property over which you have control
    • Interests you have in any business

    What happens if I die or become incapacitated without an estate plan?

    Without an estate plan, the Texas court system will decide how to manage your affairs. If you become disabled, the court appoints a guardian of the estate, who manages your finances, and a guardian of the “person,” who makes your medical decisions. The court may or may not appoint a family member to be a guardian. This process is costly, time consuming, and open to the public. 

    If you pass away without an estate plan, your estate is distributed according to Texas’ intestacy laws. The court will determine who becomes guardian of any minor children or children with disabilities upon your death or disability. This process is long, expensive and frustrating, but you can avoid it all by speaking with Alison Packard at the Packard Law Firm and creating an estate plan.

     

    At which age should a person have an estate plan?

    Estate planning is not just for the “retired.” While many people do not consider estate planning until they are older, it is wise to begin the process early in the event of an accident or medical condition that results in unexpected death or disability.

     

    What Estate Planning Documents Should I Have?

    Determining what estate planning documents you should have depends in part on your family circumstance and financial situation. While it is rare for someone to have all of these documents, a comprehensive traditional estate plan may include the following:

    • Will: A Will is a legal document that identifies a person’s wishes regarding the distribution of his or her assets after death. It can also include instructions regarding the disposition of one’s body after death, a designation of guardians to care for minor or incapacitated children, and provisions for contingent trusts if necessary.
    • Living Will: In Texas, a “living will,” “healthcare directive” or “advance directive” is formally known as a “Directive to Physicians and Family or Surrogates.”  This legal directive instructs a doctor to either use or not use life support to extend the natural process of dying if the individual who signed the directive is in a “terminal" phase of an illness or has an “irreversible condition” as defined by Texas law.​
    • Living Trust: A revocable living trust (also called an “inter vivos trust”) is an instrument that provides lifetime and after-death property management, usually without the necessity of court involvement. A living trust is established by a “settlor” (the person who places the assets in trust) who then names a “trustee” to manage the property. The trust instrument identifies successor trustees and provides instructions about the management and distribution of property during one’s lifetime and upon death or incapacity.
      • Pour-Over Will: If you have a Living Trust-based estate plan, you also need a Pour-Over Will. A Pour-Over Will allows the executor to transfer any assets owned by the decedent into the decedent's trust so that they are distributed according to its terms. 
    • Declaration of Guardian for Minor Children: If you have minor children and have strong feelings about who should be their guardian after you pass away, it’s typically best to use a separate Designation of Guardian to name a guardian for your children upon your death or disability. Most people use a Declaration of Guardian if there is an individual they wish to explicitly deny any possibility of becoming a guardian for their minor children. 
    • Declaration of Guardian in Advance of Need: A Declaration of Guardian in Advance of Need is for adults who wish to express who they want as their guardian if at any point, they become incapacitated and are in need of a guardian.
    • Power of Attorney: A power of attorney is a legal document appointing a person or organization to act for another person according to the specific instructions of the document. The appointed “agent” has designated powers, which can include an authorization to manage real and personal property, gift money, employ professional services, and make business and financial decisions. A separate medical power of attorney is used to appoint an individual to make healthcare decisions.  In Texas, a medical power of attorney is effective only upon a medical determination of  incapacity whereas a general durable power of attorney can be effective immediately or upon incapacity, according to the wishes of the person making the appointment
      • HIPAA Release: The 1996 Health Insurance Portability and Accountability Act, or HIPAA, prohibits the release of medical information to anyone without written authorization. Some medical providers refuse to release information on these grounds, even with a medical power of attorney. It’s generally safe to sign a simple HIPAA authorization form that allows the release of medical information to whomever you appoint.
     

    What is a Durable Power of Attorney?

    A power of attorney is a legal document appointing a person or organization to act for another person according to the specific instructions of the document. The appointed “agent” has designated powers, which can include an authorization to manage real and personal property, gift money, employ professional services, and make business and financial decisions. A separate medical power of attorney is used to appoint an individual to make healthcare decisions.  In Texas, a medical power of attorney is effective only upon a medical determination of  incapacity whereas a general durable power of attorney can be effective immediately or upon incapacity, according to the wishes of the person making the appointment.

     

    Who can establish a Power of Attorney?

    In Texas, any adult who is legally competent can sign a power of attorney. An adult with mild disabilities may be able to sign his or her own power of attorney, but an adult with severe disabilities may not sign one; Instead, he or she would need a guardianship. Even if you have no disabilities, it is still important to establish a power of attorney in the event that you become incapacitated unexpectedly. If a patient is 18 years or older, medical providers will not share any information about the patient to anyone, including parents, if there is no power of attorney.

     

    Who may act as an agent under a Power of Attorney?

    Any adult who is legally competent may be appointed as an agent, or attorney in fact. Most people appoint a close family member such as a spouse, sibling, or adult child, but any person such as a close friend or colleague who you trust works well. You can designate more than one agent to serve separately or simultaneously. It is generally best to appoint one agent to serve at a time, as simultaneous agents must both be able to sign when needed and must always agree on a decision regarding the principal, or individual who signed the power of attorney.

     

    Do I need a HIPAA Release?

    The 1996 Health Insurance Portability and Accountability Act, or HIPAA, prohibits the release of medical information to anyone without written authorization. Some medical providers refuse to release information on these grounds, even with a medical power of attorney. While some medical providers have their own HIPAA release form they want you to sign, it’s generally safe to sign a simple HIPAA authorization form that allows the release of medical information to whomever you appoint. Ms. Packard will include a HIPAA release form in her clients’ estate planning package without additional charge.

     

    What is a Living Will?

    In Texas, a “living will,” “healthcare directive” or “advance directive” is formally known as a “Directive to Physicians and Family or Surrogates.”  This legal directive instructs a doctor to either use or not use life support to extend the natural process of dying if the individual who signed the directive is in a “terminal" phase of an illness or has an “irreversible condition” as defined by Texas law.

     

    Have more Questions? Contact us today.

  • Guardianship & Alternatives FAQ

    What is the difference between Guardian of the Person and Guardian of the Estate?

    There are two types of guardianships. A guardian appointed to take care of the physical well-being of an incapacitated individual is called “Guardian of the Person,” while a guardian appointed to take care of the individual’s property is called “Guardian of the Estate.” In some cases, only one type of guardian is appointed for a particular person. In many cases, both a guardian of the person and a guardian of the estate is appointed.

    What is the definition of an “incapacitated person?”

    An “incapacitated person” is an adult who, because of a physical or mental condition, is substantially unable to provide food, clothing or shelter for himself or herself, to care for his or her own physical health, or to manage his or her own financial affairs. Incapacitated people may include people with intellectual disabilities, mental illnesses, physical illnesses, or disabilities related to advanced age, chronic alcohol or drug use, or other conditions. A “minor” (person younger than 18 years who has never been married or who has not had his or her disabilities of minority removed by judicial action) is also considered by law to be an incapacitated person.

    Who is likely to be appointed guardian?

    Texas law provides a priority list for choosing the guardian of an incapacitated individual, beginning with the person identified by the incapacitated individual (prior to his or her incapacity) in a “Designation of Guardian” legal document, or in some cases, the person identified by the last-surviving parent of the incapacitated individual in his or her Designation of Guardian. If no designation exists, the court looks to the incapacitated person’s spouse, if any, and then to the next of kin, followed finally by a non-relative. The priority list for guardian of a minor begins with parents, followed by the person designated by the last-surviving parent, and then the nearest ascendant (grandparents, great-grandparents, etc.), next of kin, and finally a non-relative.

    If more than one person of the same priority wishes to be guardian, the court chooses the person who is best qualified to serve. In considering priority, the court has the authority to skip over a person higher on the priority list if the court determines that the person is ineligible due to conflict of interest, lack of experience, notoriously bad conduct, or other reasons of unsuitability.

    Why are guardianships so expensive?

    Guardianship law is designed to protect the rights and well-being of individuals who lack the capacity to protect themselves. There are many steps and procedures that provide this protection and assure that all parties comply with the law. These procedural safeguards necessitate a significant amount of attorney involvement and resultant legal fees.  In addition to the proposed guardians’ attorneys’ fees, applicants for guardianship usually pay the attorneys’ fees for court-appointed attorney ad litems (and sometimes guardian ad litems), as well as court filing fees, service of process fees, legal notice costs, and bond premiums.

    Are there alternatives to guardianship?

    In many cases, there are available alternatives to guardianship such as supported decision-making agreements, medical powers of attorney, statutory durable powers of attorney, joint bank accounts, special needs trusts, etc. However, several of these alternatives are only available to individuals with capacity to understand and legally execute the legal documents. In ALL cases, alternatives to guardianship must be considered, along with supports and services, to ensure that the guardianship is the least-restrictive alternative for the incapacitated individual.

    Have more questions? Contact us today.

  • Elder Law FAQ

    How much money can I have and still qualify for Medicaid?

    The state of Texas requires that a Medicaid applicant have no more than $2,000.00 in countable resources. The key point here is whether or not your resource is countable.  The Medicaid program allows you to exclude for application purposes many things including the value of your homestead (up to $500,000), one automobile of unlimited value, your home furnishings, burial plots, up to $1,500.00 for burial expenses, and other enumerated items.  If, after accounting for your exempt resources, you still have more than $2,000 in countable assets, you will not be able to qualify for Medicaid benefits until those funds are spent for your care or you undergo some type of Medicaid planning with your attorney.

    Can Medicaid take my house when I die?

    The Medicaid program has the ability to place a claim on a recipient’s probate estate under the Medicaid Estate Recovery Program (“MERP”).  This includes laying a claim for reimbursement from the recipient’s homestead property after he or she passes away. However, a vital limitation to this power is that Medicaid is limited only to the recipient’s probate estate.  Therefore, if the home is transferred to the recipient’s heirs outside of probate, Medicaid will be prevented from laying a claim against it.

    Can’t I just gift away my assets in order to qualify for Medicaid?

    No. In fact, without properly planning for such a gift, that may be the worst thing you can do. Medicaid has instituted a five-year look-back period, which means any uncompensated transfer of property (a gift) occurring within five years and one month of your application date will be looked at and will create a penalty period. During the time of the penalty, Medicaid will not pay for vendor payments (payments to the nursing facility). Instead, you or your family will have to make those payments to the nursing home. The length of penalty is determined by the amount of transferred property (gift amount).  

    What is a Ladybird Deed?

    A Ladybird deed is a special type of real-estate conveyance which reserves in the grantor a life-estate along with some other very special powers. The life-tenant/grantor keeps the right to take back the property or name subsequent grantees. For taxing and Medicaid purposes, this is an incomplete transfer. Therefore, Medicaid allows the life-tenant to exclude the value of the home as his or her homestead. At the same time, however, the transfer/gift “vests” in the recipient (often times the Medicaid recipient’s heirs) at the time of death and the home does not become part of the recipient’s probate estate. This protects the home from the Medicaid Estate Recovery Program.

    What is a “Miller Trust?”

    In order to qualify for Texas Medicaid in 2018, a nursing home resident’s monthly income must be less than $2,250 (in addition to resource limits and other requirements). If a Medicaid applicant has income greater than the $2,250 cap, then a “Miller Trust” or “Qualified Income Trust” can be created to receive the income, pay a small personal needs allowance to the nursing home resident, pay a monthly allowance to a spouse, if any, and pay the remaining funds to the nursing home as the resident’s cost of care.

    Have more questions? Contact us today.

  • Is it Possible to Receive Compensation for Lost Income Due to My Car Accident?

    In Texas, when you are injured in a wreck that was caused by someone who was not following the rules of the road, you are allowed to seek compensation for lost wages. To recover for these kind of losses, you have to prove that you lost wages as a result of the accident.

     

    How can I prove lost wages?

    One way to prove this is by giving the insurance company a work excuse letter from your doctor for each day you were not able to work due to wreck-related health reasons. You can then provide a statement from your employer describing how much money you would have made during that period. This includes any overtime that you may have earned. 

     

    What about sick or vacation time?

    If you had to use sick or vacation time as a result of your wreck, you’re entitled to be compensated at your normal rate of pay.

     

    What if I am self-employed?

    This can be a little more tricky. If self-employed, some people use their business revenues for the year and compare what it was like before and after the wreck. However, sometimes business will have good and bad years. As a result, some people prefer to go to the previous year and develop a daily or hourly amount for compensation. They then apply that hourly or daily rate to the time you were off due to wreck-related health reasons.

     

    What if I was not employed at the time of the wreck?

    Although you are allowed to receive compensation for lost wages in these circumstances, it might be difficult to prove. You may want to talk with an attorney to discuss the possibility of recovering for lost earning capacity.

     

    What if I can work but I cannot earn as much?

    You are able to receive compensation for “lost earning capacity”. This occurs when you can work but your capacity is diminished. This happens when a wreck-related injury prevents you from performing a certain skill or type of work. For example, let us say that a person injures his back and now cannot stand for more than two hours in a day. Let’s also say that he is used to working as a real estate agent and made tons of commissions. Now, he is limited to a desk job that pays half as much. He can claim compensation for the diminished or lost earning capacity.

     

    What about the future?

    If you have a claim for lost wages or diminished earning capacity in the future the court requires expert testimony to provide extra proof for these types of losses. Please do not attempt to settle your claim until you talk to a lawyer.

     

    In summary, auto wrecks can have major medical and financial implications. You may be entitled to recover for lost wages or lost earning capacity if you have been injured in a wreck that was not your fault. The Packard Law Firm takes auto wreck cases and has over 25 years of experience fighting insurance companies and big corporations to help our clients get fair compensation. Contact us today for a free consultation.

     

  • Will the Social Security Judge Say If I Am Disabled?

    Determining DisabilityJust because your doctor says you’re disabled, doesn’t mean that the Social Security Administration will grant you disability. It is a good idea to get a lawyer to argue your case for benefits and present the facts in the most persuasive way possible.

    Who Determines If I am Disabled?

    Depending on the level of your case, it can be either a Medical Examiner or an Administrative Law Judge that determines if you are disabled. The Social Security Administration goes through three main levels in a disability case. At each level, your medical records are examined by a new person.

    The first two levels: "Initial Claim" and "Reconsideration"

    • Disability is determined by a Social Security Disability Examiner that works at a Disability Determination Service. The examiner is the person that reviews your medical records, information provided by your doctor, and any work history. The examiner will send a letter to your local Social Security office with their findings, but you do not get to meet with your examiner in person. This process is repeated twice and your claim is examined by two separate medical examiners.

    The third level: "Request for Hearing"

    • Disability is determined by an Administrative Law Judge. Many times people will go to a hearing with an attorney to speak to the judge in person or via video. The judge will read your cumulative Social Security file, which contains your medical records, work history, and reasons for your previous denials. He will also listen to your testimony and may question a medical or vocational expert to make a decision.

    What Can You Do?

    Many times, the Veterans' Affairs office, the food stamps office, or your doctors offices will write letters explaining that you are disabled. Unfortunately, the evaluation that the Social Security Administration performs is different from the evaluation that is done by those other offices. Although, it is still helpful to get letters from other offices to help prove that you are disabled. Try asking your doctors to list the reasons why they believe you are unable to work. The judges appreciate the feedback from your doctors regarding why you are unable to work or why you have limitations while working.

    To be considered disabled, the Social Security Administration has to decide that your medical conditions render you unable to maintain any substantial work, and isn’t expected to get better in the next year. Contact a Social Security disability lawyer at Packard Firm to learn about how we can help you.

  • Do I have to Pay Taxes on an Out-of-Court Settlement?

    If you are involved in a personal injury lawsuit and are considering a settlement, you may be curious about the potential tax implications. As a general rule, a case is taxed the same way regardless of whether it settles or gets a judgement in court. However, these settlements or judgments can be structured in a way to take advantage of certain tax laws.

    Most settlements or judgments can be broken down into categories. For example, an agreement or judgment might have categories like emotional distress, lost wages, medical bills or attorney fees. The taxes due will ultimately depend on the type of damages or category that is being paid out. Here are the most common types of damages and how they will affect your taxes.

    Lost Wages & Pain and Suffering

    If you are making a physical injury claim, then the IRS can NOT tax you on any any money you received from either a settlement or verdict that you receive that is designed to compensate you for lost wages or pain and suffering.

    Medical Expenses

    Likewise medical expenses are NOT taxed. However, if in a previous year you itemized deductions and claimed medical expenses that you are being reimbursed for in the settlement, then that money is taxable.

    Emotional Distress

    Damages for emotional distress that is caused by a physical injury or sickness is NOT taxed. Damages for emotional distress from other types of claims may be taxable by the IRS.

    Punitive Damages

    Punitive damages are always taxable regardless of what the reason for the lawsuit was.

    Attorney Fees

    Attorney fees that are typically associated with a personal injury lawsuit is NOT taxable. However, if the lawsuit specifically makes a claims for attorney fees, those funds may be taxable.

    Ultimately the tax implication of funds received in a settlement can quickly become very complicated. Be sure to consult with an attorney about all the potential tax implications if you are considering a settlement or just received a verdict. The Packard Law Firm is committed to helping individuals who have been injured make the best decisions for them and their families including the tax implications of those decisions. Reach out to us today.

  • Social Security is Demanding I Pay Them. What Should I Do?

    piggy bankGetting a notice that you owe the SSA money can be frightening, especially if you don’t have the money to pay them back.

    But don’t worry. If you receive an overpayment notice from the SSA you have several ways to move forward.

    What are my Options if I Receive a Social Security Overpayment Notice?

    If you receive a notification from the SSA that they are seeking money because of a past overpayment, you have three basic paths forward:

    • Appeal the overpayment
    • Pay the SSA the requested funds
    • Request a waiver

    The option to appeal is only available if the SSA did not in fact overpay you. So if the notification is correct, your only options are to pay or to request a waiver.

    How Do I Appeal a Social Security Overpayment?

    If you believe that an overpayment notice is incorrect, you have ten days from the day you receive a notice to request an appeal without affecting future Social Security payments.

    Because of the time-sensitive nature of appeals, you should contact a social security attorney as soon as you consider requesting an appeal.

    How Do I Receive a Social Security Overpayment Waiver?

    You can request a waiver from an SSA payment request even if the request is correct. Asking for a waiver is like asking the SSA to forgive the amount due.

    There are several ways you can obtain a waiver from an overpayment notice. You can show that:

    1) You are without fault for the overpayment AND that you are unable to afford to repay.

    OR

    2) You passed on another money making opportunity because of the amount you received from Social Security.

    OR

    3) You purchased something more expensive than you otherwise would have (such as a car or home) because of the amount you received from Social Security.

    How Does the SSA Determine if I Can Afford to Repay?

    When the SSA determines if you can repay it looks at whether your current income is being spent on things like:

    • Food
    • Clothing
    • Utilities
    • Medical expenses
    • Rent or mortgage

    If, however, you still have the funds from the overpayment or receive a back pay settlement the SSA will likely determine that you have the ability to repay.

    How Do I Decide What to Do?

    Because of the time sensitive nature of the process, and because individual circumstances can be complex. The best thing you can do to make the most informed decision on how to handle an SSA overpayment notification is to consult with an attorney. The Packard Law Firm is committed to helping individuals who have received overpayment notifications make the best decision for them and their families. Reach out to us today.

     

  • Can my employer fire me for filing a workers’ compensation claim?

    The threat of being fired or laid off is a major concern for many employees who are injured on the job and are considering workers' compensation. However, it is actually illegal for an employer to terminate an employee who is seeking workers' compensation benefits, has hired an attorney for an injury claim, or is otherwise acting in good faith after an injury at work.

    Texas Law Prohibits Firing an Employee for Collecting Workers’ Compensation

    Section 451 of the Texas Labor Code expressly forbids discriminating against employees for filing valid workers' compensation claims. The law dictates that no person may discharge or in any other manner discriminate against any employee who has:

    • Filed a “good faith” workers’ compensation claim for a compensable job-related injury
    • Contacted or engaged the services of an attorney for the explanation and protection of the employee’s rights or to represent the employee in a workers’ compensation court
    • Instituted any actions protected under workers' compensation laws in good faith
    • Testified or will testify in a legal proceeding involving a workers’ compensation claim (protection is given for both injured employees and coworkers who are testifying on behalf of the injured employee)

    The purpose of these laws is to allow injured employees to be treated fairly and receive adequate compensation after an injury on the job. After all, workers’ compensation would not offer no-fault protection for injured workers if the worker could simply be fired at will by the employer after an accident. As long as an injured employee genuinely needs compensation to recover from an on-the-job injury, the right to payment shall be protected under state law.

    What If I Was Fired While Pursuing Workers’ Comp Benefits?

    If any employee is fired in retaliation for filing a workers' compensation claim, it is a clear violation of the labor law and grounds to file a wrongful termination lawsuit. However, in order to prove that the labor code has been violated, the employee must be shown to have acted “in good faith.” 

    “Good faith” is a legal term meaning with honest intention or without intent to deceive. While the majority of worker’s compensation claims are made in good faith, it is worth examining the details of your case to ensure that all of the information is correct and truthful. Any misrepresentation of the facts on your part may be seen as deceit, and can result in the denial of benefits as well as legal dismissal from your job.

    Some examples of claims that are not filed in good faith may include:

    • Payment for treatment that was not medically necessary
    • Filing a claim for an injury that was not work-related
    • Claiming a previous injury that was not related to a compensable condition
    • Filing for benefits after being declared fit for previous employment
    • Claiming that an accident or injury is worse than it is to maximize benefits
    • Lying about the circumstances of the accident to hide employee responsibility
    • Collecting workers’ compensation disability while illegally performing sustainable work
    • Continuing to cash a deceased person’s workers’ compensation checks
    • Lying about the injuries sustained or treatment received
    • Filing a claim for an injury that the employee caused on purpose
    • Filing for benefits for an injury sustained while the employee was drunk or on drugs
    • Asking coworkers to lie to support a false work injury claim

    Although there is a persistent myth that employees file thousands of bad faith claims every year, the truth is most workers’ compensation claims are entirely valid. As long as you were working within the scope of your employment and suffered a significant injury, you rightfully deserve payment for your medical treatment and lost income.

    If your employer is treating you differently or is threatening to fire after you filed a workers’ comp claim, we can help. Our attorneys can work to get you reinstated with back pay, ensure your benefits continue, and even explore your options to get additional compensation through a work injury lawsuit. Contact the Packard Law Firm today to tell us more about your case in your free consultation. Anything you tell us is confidential, and we do not charge anything unless we win your case.