Need Advice

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itstime's picture
itstime
Status: Member (Offline)
Joined: Dec 8 2008
Posts: 4
Need Advice

Hi I am new on this site as I came upon it over the weekend.

I need to make a very important decission later this week for my 17 year old daughter who has received a large settlement for a car accident she was in when she was 12.

My question is should I invest in a structured settlement or take the lump sum?

I am scared to accept the structured settlement as we can all see how the economy has been and I am afraid that if I do the company that handles the structure may go under - as we are seeing this often lately.

I have considered putting the monies in a trust account, but the attorney who is handling the case is pushing for me to accept the structured settlement.

I know that structures are not FDIC insured and that there is no guarantee and if anything were to happen then her money would be gone.

Any advise is greatly appreciated as I really don't have family to advise in this particular situation.

Thank you

gyrogearloose's picture
gyrogearloose
Status: Platinum Member (Offline)
Joined: Sep 8 2008
Posts: 545
Re: Need Advice

Spend every minute you can at this site and reading the "related articles" "essential reading"  hmm   went to look for that section and can't see it in  quick glance. Just read everything here ;-)

The more time you spend getting your head around this the better before making an important decision.

 

As for accepting advice of the attorney, ask questions to see if he is aware of what you have found here ( as of anyone wanting to giving financial advice )

As you will see form this site, most "financial experts" were completely caught by surprise by recent events, Chris saw it coming. Who would you put your faith in ?

Chirs really does not give advice, just information on how he sees things and gives you tools on how to make decisions.

Cheers Hamish

 

TimesAwasting's picture
TimesAwasting
Status: Silver Member (Offline)
Joined: Oct 13 2008
Posts: 100
Re: Need Advice

I'd take the money in a lump sum... that way you could invest it as you see fit, irrespective of the insurance company's financial health. You could also structure a distribution schedule for your daughter on a monthly or annual basis, based on her needs.

just my 2 shekels worth. Good luck and welcome to the forum!

itstime's picture
itstime
Status: Member (Offline)
Joined: Dec 8 2008
Posts: 4
Re: Need Advice

Well that's what my better half is telling me to do. However, I just dont know.

My gut tells me to take the lump sum, but she is so young,  I am afraid of what she will do with it once of legal age.

The structured settlement is tax exempt - and is guaranteed a tax rate of about 6 percent, though taking the lump sum, I will have to pay taxes on all interest and it will only be earning around 3%.

ahh all these options and not knowing which way to turn

 

maveri's picture
maveri
Status: Silver Member (Offline)
Joined: Nov 20 2008
Posts: 159
Re: Need Advice

A bird in the hand is better than two in the bush, to drag up an old saying.

The truth is , no-one knows for sure.

We are venturing into areas never charted before so the only thing one can do is read the material to get a solid foundation about what's being said, then reference other information (that doesn't have a vested interest in your money!) and draw your own conclusions.

Based on those (i.e. your own) conclusions, draw up a plan that fits.

It's not a simple 'give me 10 easy steps to follow' - if you fall for those schemes then you will get fleeced of your money for sure. That is certainly not what this site is for.

As the recession bites, expect some people to resort to their animal instincts and rip off others with scams, cons and financial advise, while others will understand a much bigger picture and will work with others for all of our future. I think the world is finally ready to tell the greedy whoremongers who have ruled for so long, just where to get off - sadly they will not go down without a fight however, having had their snouts in the troth hogging more than their fair share for so long...

Best wishes on being enlightened and directing your own future...

:-)

 

 

itstime's picture
itstime
Status: Member (Offline)
Joined: Dec 8 2008
Posts: 4
Re: Need Advice

Thanks for the enlightment

So far I think that the bird in my hand is best.

 

JeffCFP's picture
JeffCFP
Status: Member (Offline)
Joined: Nov 22 2008
Posts: 3
Re: Need Advice

You need to consult with a qualified financial planner who has experience and is not looking to sell you a product.  Your best bet would be to ask your most trusted friends (at least those friends who have money) who they trust.  Then check those names against the www.cfp.net website to find out which one are CFPs.   As far as the opportunity for your daughter to blow the entire lump sum settlement, there are a myriad of solutions on how to position the assets.  If your attorney specializes in insurance settlements and damages, ask him to refer you to a good estate planning attorney.  I'm a financial planner and many of my clients have structured trusts for their children so that they do not have access to 100% of potentially inheritable assets for many years past the age of 18.   For example, you could give her access to 10% of the principal at age 18, plus all the income annually.  Or perhaps you'd only want to be able to use what is "reasonable and necessary for education expenses" as set forth in a trust document, and then regulated by the Trustees of the trust.  Then at set ages, you could give her access to a larger amount of the principal.  Age 22, it could be 20%, age 25 it might be 25%, age 30, maybe 35% as much as 50%.  Then at age 40, you could let her have access to the entire amount.

There are a number of different ways to skin a cat...this is only one way to do it.

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Re: Need Advice

Are we talking thousands?  Millions?

Personally, I'd take the money.  Who knows if ANY of these companies will see the crash through?

Everyone here will tell you I think ourside the square.  So what will your daughter need when she grows up?  Here's my list:

Food

Water

Shelter 

Anything else is icing on the cake.  Which is why I would want to know how much money is involved, you can tell me to mind my own business, I won't be offended...!

We organised for our 21 yo daughter to do a Permaculture Design Course, the best education she could ever get.  When we go to greener pastures, she will inherit 1 1/2 acres of productive land and a house that has no upkeep costs, 100% self sufficient in power and water.

And THAT my friend is what REALLY matters......  Money (as we know it) is finished AFAIC. 

krogoth's picture
krogoth
Status: Platinum Member (Offline)
Joined: Aug 18 2008
Posts: 576
Re: Need Advice

10 cargo containers full of alcohol, 10 cargo containers full of cigarettes and 10 cargo containers full of guns and ammo, stacked in an easy to access manner. A small 4 acre parcel of land near a highway, surrounded by a fence with Constantine wire and 1 wind generator. She will make 100 times her money back in gold, or could trade for food or needed supplies. The wind generator could be lit up for all to see with a flashing sign saying "Cigarette's, Booze and Guns" in some neon sort of fashion.

She is only almost 18, so depending on the state, she might not be able to sell this stuff. Have her hire some older help and pay them in supplies. Once she sells enough stuff, the cargo containers can be used as shelter. Buy some tents in the beginning.

Props to RLEE for his inspiration

 

 

 

 

 

ckessel's picture
ckessel
Status: Martenson Brigade Member (Offline)
Joined: Nov 12 2008
Posts: 483
Re: Need Advice
itstime wrote:

Well that's what my better half is telling me to do. However, I just dont know.

My gut tells me to take the lump sum, but she is so young,  I am afraid of what she will do with it once of legal age.

The structured settlement is tax exempt - and is guaranteed a tax rate of about 6 percent, though taking the lump sum, I will have to pay taxes on all interest and it will only be earning around 3%.

ahh all these options and not knowing which way to turn

 

Itstime,

Chris is offering a free webinar tomorrow morning, Wednesday at 8:AM PST that may help you on this. It is skewed toward gold but the information could help.

My two cents worth: I'd go with the Food, Water, Shelter basics first and suggest she find someone like Krogoth to guard the gates when the time comes!

gregroberts's picture
gregroberts
Status: Diamond Member (Offline)
Joined: Oct 6 2008
Posts: 1024
Want a serious license free Radio station in your town?

Interesting idea... 

http://www.dailypaul.com/node/75372

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