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Structured Settlements, Financial Professionals, and Good American Dads

Todd Kipnes - Thursday, September 17, 2015

While structured settlements are suitable for even the least financially sophisticated, it may surprise people to know that our "best customers" are frequently plaintiffs who themselves work in finance, including hedge fund managers, investment bankers and financial advisers.  Based on our experiences, these sophisticated financial professionals often appreciate the benefit of allocating a significant portion of their (or their family's) recovery to a guaranteed, predictable, long-term investment that is not subject to any taxes, fees, or commissions, or to fluctuations in interest rates or the stock market, but which is also flexible enough to allow re-investment of the benefit payments, at prevailing rates, as they are received.

Recently, we were contacted by one such plaintiff -- a highly successful investment adviser who had structured a significant portion of his son's personal injury settlement several years ago.  He himself had encountered health problems, and was concerned about his son's future should something happen to him.  His hope was that he could add the unstructured portion of his son's settlement -- money that he had been managing in the interim -- to the structured portion, to create a single guaranteed income stream that would last, potentially, long after he was gone.  In discussing his rationale, this long-time U.S. resident who had lived for decades on two other continents, explained that providing for his son's future in this way is "what any Good American Dad would do".

I wanted to share this anecdote because I think it helps capture how a structured settlement provides security and piece-of-mind to an injury victim and his family in a way that is difficult to explain in purely economic terms.  Too often, the quest for potentially higher yields introduces stress and uncertainty (not to mention the possibility of lower yields), which injury victims and their families are ill-equipped to handle.  Put simply, this professional money manager did not want his family to have to worry about money management, seeking instead the safety and predictability of the structure.  As mentioned above, financial professionals frequently appreciate the economic benefits of a structured settlement, but this is an example of one who understood the non-economic benefits as well.    To his mind, the structure was not simply a financial decision, but a decision about family, responsibility, love, and what it means to be a Good American Dad.

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Kipnes Crowley Group LLC
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