Money for nothing

Posted on December 6, 2011

Ben Levisohn at The Wall Street Journal frequently writes about personal investing and the pitfalls of money management. Levisohn is usually insightful and his recent article, “Easy Money's Hard Lessons,” is no exception.  He covers so-called sudden-wealth syndrome or more accurately, the personal and financial problems many confront after coming into a large amount of cash such as a lottery payout or inheritance.

This is hardly a new phenomenon and we’ve documented many examples on our webpage, “Big Jackpots, Bigger Tragedies.” 

The bigger issue involves the reason for the sudden money. If a gambler hits the jackpot, he could presumably waste the entire sum and he’d be no worse than before. But if the money is designed to pay for lost living expenses or future surgeries, as is the case in injury settlements, that’s obviously a much bigger issue.

As Joe Jamail put it in his 2009 NSSTA speech, the lawyer representing an accident victim has “an obligation” to make sure settlement money is preserved for future needs. That’s why he has spent his career encouraging structured settlements.

To hear more about Mr. Jamail’s view on structured settlements, see below.