Each year, around 1.5 million people in the U.S. suffer a traumatic brain injury—many of them life-changing.1 Traumatic brain injuries (TBIs) may cause cognitive deficits, increase the risk of dementia, and create permanent problems with memory, impulse control and vision or hearing. If you or a loved one suffered a TBI, it might be important to take action quickly to guard your rights. Here are three key steps to take when dealing with a TBI.
Arranging Powers of Attorney
Many of those who sustain a TBI lose the ability to handle their own financial and medical affairs. This condition may last for a short period or be permanent. It may be important to have medical and legal powers of attorney in place to delegate these important decisions to a trusted loved one if you become incapacitated.
A medical power of attorney grants someone the ability to make medical decisions on your behalf while you cannot do so. One example of how a medical power of attorney may apply is when someone is undergoing surgery or in a coma.
A legal power of attorney grants someone the ability to make legal and financial decisions on your behalf if you are incapacitated. Someone who holds this power of attorney might do things like pay bills, withdraw funds from your savings account to be used for your care and take other steps needed to keep your finances in order when you cannot.
Both powers of attorney may be as expanded or as limited as you like. Moreover, you do not have to name the same person to perform both duties.
Considering a Trust
In some cases, the cognitive or impulse-control impacts of a TBI may be serious and permanent. Individuals dealing with cognitive deficits after a TBI may be at risk of falling victim to scams, fraud, or even an abusive caregiver. In these situations, a trust may help manage the injured person's finances and hopefully ensure provisions for them in the future.
Although you may need an attorney to help you draft a trust, it is important to talk to a financial professional first to ensure you understand what a trust may do and how to use it.
Planning for a Possible Legal Settlement
If someone suffered a TBI because of someone else's negligent actions, they might be entitled to a legal settlement. And while receiving funds to help pay for the aftereffects of a TBI may seem like a victory if the injured person is receiving Medicaid, food stamps, Section 8 housing, or Supplemental Security Income (SSI) benefits, it may have unintended consequences.
These government benefit programs are means- and asset-tested. Getting a sudden infusion of cash may make a recipient ineligible—even if that cash is not enough to help cover their expenses for more than a month or two.2 A financial professional may work with you on developing an appropriate way to manage your settlement funds, whether they come through the purchase of an annuity, a Special Needs Trust, or another financial instrument.