When a catastrophic event cccurs in a child’s life, it’s important to plan carefully to ensure stability for the years to come. Planning for college becomes even more important when the child has already sustained substantial loss. The possibility exists that college funds could be invested poorly, or given to an immature 18 year old that would spend it all, leaving nothing for the college years

A unique option exists that can safeguard funds for children receiving a physical injury or wrongful death settlement--a structured settlement. Structured settlements are guaranteed, tax-free payments, guarded from the risks associated with investing. They are free from investment management fees and worry from fluctuations in the stock market or interest rates.

Structured settlement offer additional benefits:

• If the child is not able to attend college, or feels college isn’t the best option for them, they still received tax-free payments. 529 plans do not offer this benefit. Distributions from UGMA/UTMA’s are not tax free.
• Structured settlement payments are fixed in the amount and the date they will be paid, eliminating the risk of inappropriate withdrawals by the child or guardian. TGMA/UTMA account balances are turned over in full to the child when the age of majority is reached.
• Structured settlements income is always received tax-free. Favorable tax treatment of 529 plans is cuirently only approved through 2010.
• Structured settlements can be established to pay for the educational needs of an adult. Coverdell Accounts and UGMA’s have age limitations.