It is a plain fact of life that settlement decisions are, first and foremost, evaluated from the standpoint of their legal sufficiency. Much attention is paid to adherence to statutes, the careful drafting of orders and agreements, and compliance with legal procedures.

But the energy expended to meet these legal requirements regularly overshadows and displaces even moderate scrutiny of the financial suitability of the settlement. Attention is paid to gross settlement value, but comparatively little to the relative merits of one form of distribution over another.

This can lead to misjudgments at settlement with costly long term consequences for wards-and potentially for settlement fiduciaries themselves. The traditional "blocked account" has been left in the dust by far more sophisticated and beneficial distribution options for all but the smallest cases. Fiduciaries who fail to consider these modern options risk breaching the duty of care to their wards.

Worse still, many of these benefits must be captured at settlement or they are lost forever. Failure to consider them can equate to permanent waiver of a lifetime benefit. The present value of such lost future benefits can be staggering, reaching six figures in many cases.

While a strict standard of care for fiduciaries in the specific context of settlement has not yet been articulated in all jurisdictions, probate courts routinely rely on the "prudent investor standard" when evaluating a fiduciary's decisions. Although a routine consideration in trust and probate matters, most personal injury attorneys, GALs, and guardians are not familiar with this standard, few indeed having ever actually seen a copy of the Prudent Investor Standard in print.

But ignorance of this standard and these new settlement options is no defense. The prudent investor standard requires fiduciaries to make decisions as would a prudent person "familiar with such matters"*. Ignorance or only casual familiarity itself is no excuse. If you agree to serve as a fiduciary, you had better familiarize yourself with your duties and the settlement options available to your ward.