Burning Through 90k In A Year From A Lump Sum Payment
Block 19.3 Article 2.3 Transfers of Structured Settlement Payment Rights
Burning Through $90K in a Year from a Lump Sum Payment
Hindert, et al in Structured Settlements and Periodic Payment Judgments October 2014, give a great example in a “lump-sum-gone-bad” where in this case, the claimant would have greatly benefited from some kind of periodic payment:
“One example from Minnesota was this: A minor settles a personal injury action for a lump-sum payment that is placed in a special account until he turns 18. Upon reaching the age of majority, he moves in with friends and uses the funds to buy a car and “party down”, burning through $90, 000 in a year.”
Sometimes, the parents request that their injured minor receive the entire lump-sum at the age of majority as in the case in New York. A New York court rejected the request of parents to distribute over $500,000 to a young girl on her 18th birthday, who was struck by a car and suffered lifelong neurological damage.
According to Hindert, et al, the question is whether courts have statutory authority to extend periodic payments beyond the age of majority.
People have the right to squander, invest, or use the money how they see fit after the age of majority.