A recent caller had a question about her Illinois workers’ compensation settlement. Her lawyers were pushing her to take an annuity. That means instead of getting a lump sum settlement where she gets all of the settlement money at once, she’d get paid out over time.
She told me the name of her lawyers, and I had never heard of them. I looked them up, and they mentioned annuities on their website which is really odd. I have no proof, but I wouldn’t be surprised if they got a kickback from setting up annuities or somehow had a financial motivation to do so. This was a smart woman who definitely doesn’t need a structured settlement.
The answer to her question, as to if she had to do this, was a quick and firm NO!!!
Nobody has to take an annuity or structured settlement. Is it a good idea for some people? Sure. If you win a big lawsuit and suddenly have millions coming to you, but prior to that were broke, it might help you not overspend and go broke again. We’ve seen that happen to too many people.
These annuity devices can be a good way to help you stay within your means. It can also help prevent people from coming after you for money once they hear about it. It’s also a great idea for young people who get money before their brain is fully formed and may not make the best decisions.
Side note, if you ever get a settlement whether big or small, I HIGHLY recommend that you not tell anyone about it. And definitely don’t post about it on social media.
Back to our regularly scheduled blog post. If you feel comfortable managing a large sum of money or if you just want it all now, you don’t have to take a payout over time. If you want to waste it all on hookers and blow, I can’t advise that but also can’t stop you.
Most people we come across are smart enough to not waste all of this money or get swindled by others. Your lawyer can certainly make recommendations, but they can’t refuse to go through with a settlement if you say you want all of your money at once.
By the way, no attorney gets their payment over time. They are getting paid all at once. If it’s good enough for them, it’s good enough for you.
Bonus tip. If you’ve gotten to the settlement point and your lawyer is insisting you take your payments over time even though all of the money is coming in at once, there’s not much we can do for you other than tell you to push back. The time to get a new lawyer is before problems like this begin.
