Milestone’s Commitment to Assisting Sexual Assault Survivors
From surviving to thriving
Milestone helps survivors of sexual assault think ahead with their settlement money to achieve lasting financial security. At the core of our comprehensive settlement planning practice are compassion and understanding.
A survivor’s journey does not end at the conclusion of a lawsuit. That’s why our holistic approach involves taking the time to learn about the individual’s needs, concerns, and goals for the future. We then provide the best planning options along with trustworthy guidance and care. Our experts educate survivors and their attorneys on tax implications as well as options for spreading their settlement to help them reach milestones and receive guaranteed future income. With the right understanding, survivors can move forward confidently into the next chapter of life.
Our partnership with Bridie Farrell
Bridie Farrell is a nationally ranked speed skater who competed in Olympic Trials and held three American records. At the age of 31, she disclosed that beginning at age 15, she was sexually abused by her then 33-year-old teammate, an Olympic silver medalist. Sixteen years after the abuse ended, Bridie became an outspoken advocate to end child sexual abuse. She formed America Loves Kids, a nonprofit that educates the public about child sexual abuse, connects survivors to resources, and works to improve related laws and policies. Bridie worked with lawmakers to spearhead legislation in New York (the Child Victims Act) and Arizona (H.B. 2466), both of which substantially extended the time for survivors in those states to take civil action against their abusers.
Milestone has partnered with Bridie Farrell, whose advocacy work supports trauma survivors throughout their journey to justice. This exclusive partnership enables the support to continue beyond settlement. “We’re poised and ready to help as many survivors as we can, and we see this strategic partnership with Bridie as a major step forward in being able to do so,” John Bair, CEO and founder of Milestone, said in a press release. “Bridie’s voice coupled with our firm’s prowess positions us to truly give survivors the level of service and care they deserve.”
Trauma-informed care team training
Milestone has received training in trauma-informed care from Dr. Laura McGuire, founder of the National Center for Equity and Agency. This training has equipped our team members with the knowledge, understanding, and compassion to best assist survivors through their settlement planning journey.
The Settlement Account
Milestone spearheaded a new initiative for sexual abuse survivors who are about to receive a settlement. The Settlement Account is a qualified settlement fund exclusively for any person in the U.S. who receives a personal injury settlement from a sexual assault case. This specialized trust allows our team to customize a survivor’s settlement experience with free, comprehensive settlement planning services while providing anonymity, confidentiality, and unlimited time to plan.
Are sexual abuse and assault settlements taxed?
Sexual abuse and assault settlements are tax exempt. Under IRC 104a2, a long-standing tax law, you do not need to declare or even put any information regarding a personal injury settlement on your tax return. Therefore, you do not need to pay federal or state income taxes on your settlement*. The IRS tackled this issue in 2008 to provide clarity to survivors. In a memorandum by Chief of the IRS, Michael J. Montemurro (ILM 200809001), the IRS assumes that there were personal physical injuries when the abuse happened – even though the lawsuit and settlement followed many years later (when there would likely be no more observable bodily harm). Pursuant to the memo, survivors do not have to prove any physical elements of their cases for tax reasons. Below is an excerpt from the memo.
“You have inquired about the tax treatment of payments made by Entity to settle claims of Tort asserted by Claimant (C). C has alleged that Entity’s agent(s) X caused physical injury through Tort while he was a minor under the care of X. A substantial amount of time has elapsed since the alleged Tort occurred. C alleges that he continues to struggle with the trauma resulting from the alleged Tort. Because of the passage of time and because C was a minor when the Tort allegedly occurred, C may have difficulty establishing the extent of his physical injuries. Under these circumstances, it is reasonable for the Service to presume that the settlement compensated C for personal physical injuries, and that all damages for emotional distress were attributable to the physical injuries. Consequently, the Service should concede that compensatory damages paid to settle the claim are excludable from gross income for federal income tax purposes.” Read the full text here.
Our CEO, John Bair, wrote an article on Milestone’s Legal Examiner about the taxation of sexual abuse settlements.
*If your case went to verdict in a state or federal court, the only portion of your settlement that would be taxable are pre- and post-verdict interest or any punitive damages awarded.