According to a recent study published by US News & World Report , college tuition and fees have risen significantly at all levels. In-state colleges have experienced a jump of 175%. Out-of-state college and private colleges have also increase by 141% and 134% respectively. Add to that other costs including housing, food, books and transportation. It’s no wonder why student loan debt has become a national crisis.
Settlements for Minors – Cash or Structured Settlement?
Knowing the financial challenges that face young adults, it has always puzzled me when parents and guardians choose a cash settlement for a minor over a structured settlement. Payment of a cash settlement into a court registry or blocked account results in putting a lump sum of cash into the hands of the minor the day they turn the age of majority. How many 18-year-olds are financially savvy and fiscally responsible? Few, if any. They simply don’t have the education or life experience to deal with the pressures that sudden money will bring. Choosing a lump sum for your child is setting them up for failure.
Unlike blocked accounts, a structured settlement will provide tax free interest growth. It also provides a set payment schedule that the parents or guardian determine. The payment stream is customized for the minor and can pay during the college years and beyond. Such as paying for school, providing for transportation, paying off loans, helping to purchase a house and many other options that ensure as parents you’ve given them the best start in life possible.
Parents or guardians of minors expecting a settlement should ask for a structured settlement. Defendants and their insurers should offer them when dealing with minors. It can be the difference between a fiscal failure or a sound financial future.
By John McCulloch | Structured Settlement Consultant, Vice Chairman
John holds an MBA from the University of Phoenix, a JD from Kaplan University, and a BA in Business from St. Martin’s College. In addition, he has completed graduate studies in Electronic Commerce at the University of San Diego and holds the following professional designations: CSSC, FLMI, WCLS, AIAA, ACS, and CMSS™, as well as an accounting certification from the Department of Defense. His formal insurance training includes casualty, property, fidelity and Workers’ Compensation claims, as well as Life and Health underwriting.
