Our 3-yr old lost the top part of his ear due to a neighbor’s playful dog jumping on him. Their homeowners wants to settle. Blocked or structured acct?

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Our 3-yr old lost the top part of his ear due to a neighbor’s playful dog jumping on him. Their homeowners wants to settle. Blocked or structured acct?

Asked on April 20, 2009 under Personal Injury, Washington

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

There is no one best answer.

Whether to take a cash payment for a minor in a lump sum (which will be held for the child until s/he is 18) with earlier access depending on the ability to convince a judge money should be released sooner, possibly for things such as special expenses (therapy, reconstructive surgery, private school, etc.) or taking it by means of a structured annuity depends on a variety of factors.

The factors include the safety and stability of the institution holding the assets (big banks and insurance companies can fail), the ability to get government protection for the assets (the FDIC limit of $250k per depositor is scheduled to go back down to $100k at year end, and life insurance company guaranty funds vary in terms of the protection they offer from $100k to $500k depending on state and how each characterizes the proceeds), the implicit interest rate built into the structured settlement, its payment terms, the tax status of the people (the interest is tax free to the beneficiary of a structured settlement), what the casualty company will pay to the life company for the structured settlement, any life contingencies, etc.

You need a good, independent financial advisor or actuary who is fee based and can advise you.

I trust you've had a lawyer assist you -- and get the lawyer's advice; but s/he will get his or her fee in cash.


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