If you’re a parent of a teenager, you could probably make a mental list of the daily challenges and uphill battles involving him or her. We spend a lot of time as parents trying to do right by our kids, planning for their futures so they can be as successful and happy as possible.
If your child has sustained a catastrophic injury, you’re dealing with a whole new set of obstacles and challenges. Lawsuits involving teens can be terrifying for parents — first, the injury of the child, then compounded by the stress of litigation. It can be a lot to handle. And although it marks the conclusion of the lawsuit, settlement can be equally stressful.
Not many teens are equipped to handle such large sums of money responsibly, and our parent clients often express their concerns with adequately protecting their teen from the risks of having a substantial amount of money at a young age.
Having consulted on thousands of settlements in the last 15 years, I’ve come to learn that cases involving teens aged 13 to 17 with settlements in the range of $100,000 to $500,000 can pose the greatest challenge to the lawyers representing them, as well as to the courts and the child’s parents.
What are Parents’ Biggest Concerns as Settlement Approaches?
For the parents of a teen who is about to receive a settlement, there are often several overlapping concerns. These seem to be the major ones:
- What could happen if the child receives all the money at age 18
- That the money is safeguarded and achieves a modest return
- Whether the money can be made available in amounts that increase in tandem with the child’s maturity (less money at age 20, more at 25, then more at 30)
- If the parent can have the ability to positively influence the child’s decision making and financial risk taking after he or she becomes an adult
Some wrongly assume that parents most often want full control of the child’s money. However, I have found that it’s is rarely the case. Instead, the parents simply want to protect their teen.
Many parents don’t want these scenarios to occur:
- They (the parents) come between the child and his or her money
- The large sum of money discourages the child from pursuing college or employment
- The child frivolously spends all the money
Simply put, parents of an injured child typically want to strike a balance between receiving the money when it’s needed and preventing the child from accessing all of it until the child is mature enough to handle it.
Teens are the toughest age group when it comes to settlement. While young children have time to allow the money to grow, teens have less of that luxury. If the payout is from age 18 to perhaps age 25 or 30, the assets only have 10 years or less for growth. It can be difficult to achieve much in such a short duration.
There are a vast number of approaches for teens to get the most of of their settlement. For example, a client of ours fell from a balcony and suffered a traumatic brain injury. As a result, he began to deal with severe anxiety and depression. When he received a settlement, Milestone identified the best plan for him moving forward. We established a trust that pays for all his medical needs, with a Medicare set-aside so he can still get government benefits and a monthly prepaid debit card to help him manage money. His trust also pays for one of the best rehab facilities in the country. He is getting the most from his settlement, and his parents have the peace of mind that he has the right financial, emotional, psychological, and physical care.
Any settlement involving a teen requires a careful, detailed approach. If you’re a parent with a teen about to receive a settlement, be sure to build your planning team. Leveraging the services of a settlement planning expert, your attorney, and other helpful professionals can give your family the best opportunity to properly preserve your teen’s settlement so it’s as beneficial as possible.
A West Point graduate where he served as captain and military aviator, John Bair continues his commitment to our country through his efforts within the settlement planning industry. He has represented families of victims lost in the Flight 3407 crash, offered pro bono services to the families of 9/11 victims and drafted the first consumer protection bill for plaintiffs (H.R. 3699).