What to Do with a $100,000 Settlement?
Winning a settlement in a court of law is not an easy task. It requires a lot of effort, time, dedication, consultation with accident attorneys, and persistence. With all the stress, anxiety, and depressing moments in court, when victory comes about, it is well deserved.
Though happiness is accompanied by both relief and anxiety, it is time to move on with life. Having a sum of $100,000 can be overwhelming for a person who has no plan for the money.
Before spending the money, a person should have an account and plan for every amount spent. Here are some tips to help a settlement winner have an easier time handling and using the money wisely.
Sort Out Tax Implications
After the court releases the settlement, a person should follow up with the tax implications. This is to help in understanding how much the remittance may be taxed. Sorting out taxes is a crucial step that should give a person a head start.
At times, some settlements may be tax-free, while others may have some tax deductions to be made. The tax implication procedure should be among the first steps a person takes after receiving the $100,000. Set aside some money after knowing the tax amount to take care of it.
If it is possible, send it to the relevant authorities. Leave the other amount in the savings account until there is a ready plan. Always make sure the tax liability is paid before starting investing. Proceed with the rest of the plans using the remaining settlement funds.
Find a Financial Advisor
Seeking a professional to help plan for the money is a good idea. While managing a windfall, a person may experience some emotions or anxiety. Due to mixed feelings of both relief and joy, one may not know where to begin.
It is, therefore, important to consult a professional financial advisor.
Pay Off the Debts
One of the ways to become financially sound is by being debt-free. After receiving the payout, one should pay off all their debts, whether mortgage, pending expenses, or credit card debts.
Living a debt-free life gives a person some peace of mind. Though this decision may seem obvious, having a large amount of money may skew some financial obligations.
At Tom Fowler Law, they allow clients to pay what is owed on the release of the settlement. After paying off the debts, the client may start saving or create a retirement or emergency account. A good financial advisor can help in making the ideal decision on this.
Invest in a Retirement Home
After receiving the settlement, whether it be the minimum payout or average payout, one should invest a specific amount in building a permanent home. If the person already owns a home, they may decide to invest the money in real estate or other investment options. It is, however, important to perform some research before deciding to own a property.
Make sure that the necessities and priorities are set right before proceeding to the investment plans. Consult the residents and conduct surveys to acquire the best retirement home.
Start a Business or Help Friends and Family
If a person is involved in a personal project, they may choose to assist a friend or family member. The assistance may be to pay school fees, rent, or debt.
Though it is ideal to spend the money wisely, an individual can take advantage of starting a business using the money.
The business may be a form of investment to increase income. Consult qualified lawyers from Tom Fowler Law, based in Des Moines, Iowa, to make sure the money is well spent.
Donate the Money to the Needy
After fighting hard to get the settlement, it is only right to make someone else happy. Giving a share of or all the money to charity is a good idea. This move is a smart decision that may leave a person fulfilled for the rest of their life.
Alternatively, the settled individual can consult a tax advisor to have a charitable trust fund for an organization.
Even though it is not easy to win a settlement, it comes with a good feeling. It is up to the individual to decide on how to use the settlement fund. One may choose to enjoy themselves or invest. It is entirely up to them. An ideal scenario would be to consult professionals and invest wisely.