Handling a Cash Settlement

by Lee Wyatt
(last updated August 23, 2013)

Many people sit and dream about the opportunity to win a huge amount of money at the casino, or in the lottery, or even be awarded a lot of money in a court case. However, what most people don't stop to consider is that handling a cash settlement often comes with as many negatives as there are positives, and often even more. With the proper care, forethought, and planning handling a cash settlement can be the blessing that most of us hope that they are.

  • Obtain advice. The very first thing that anyone who is thinking of handling a cash settlement must do is obtain professional help. This is not to say that you will need to go out and get a therapist, but rather you should hire a money manager. With the help of a money manager you can ensure that your money doesn't get wasted, and that it will in fact grow in size. Before hiring a money manager though, make sure that they have a positive reputation.
  • Don't be in a hurry. One of the common problems that many people run into is that they get into a hurry about buying things, or even simply getting into a hurry period. The key to handling a cash settlement is to slow down and take your time. Consider all of your options, listen carefully to the advice that you get from people you trust, and then carefully make your decision.
  • How will this affect your taxes? Another of the huge things that many people fail to consider when handling a cash settlement is the question of taxes. Most often a large cash settlement will mean that the winner is put into a higher tax bracket. Often that higher tax bracket will mean that you pay a larger amount of taxes. In addition to the amount of money in the settlement being taxed, most things that you purchase with it can also be taxed (such as houses, cars, and other "investment" type items).
  • Can you sell it? Many people think that a great way to go about handling a cash settlement is to sell it off for one lump sum. However, this may not always be the case. The reason for that is that there can sometimes be legal limitations to whether or not you can sell a cash settlement. Before you sell the settlement, make sure that first you legally can, and second that you can financially afford what the results will entail.

Author Bio

Lee Wyatt

Contributor of numerous Tips.Net articles, Lee Wyatt is quickly becoming a regular "Jack of all trades." He is currently an independent contractor specializing in writing and editing. Contact him today for all of your writing and editing needs! Click here to contact. ...

MORE FROM LEE

Installing Vinyl Plank Flooring

If you are looking for an inexpensive alternative to traditional flooring, then you may want to consider installing vinyl ...

Discover More

Cleaning Mildew from an Icemaker

Perhaps one of the most difficult cleaning problems a person can face in the kitchen is having a mildew infested ...

Discover More

Floor Stripping

When most people want to wax a floor, they forget one of the most basic steps, stripping it. Floor stripping doesn't need ...

Discover More
More Money Tips

When is it Time to Change Employment?

Leaving a job is never a fun, but sometimes it is absolutely necessary to do so. But when is it time to change ...

Discover More

Unclaimed Money

Many people don't realize that they could have money sitting out there that they don't know about. With just a little bit ...

Discover More

Staying Financially Grounded Through Divorce

Divorce can be a difficult time emotionally. Emotions can get in the way of making good decisions about your financial ...

Discover More
Comments

If you would like to add an image to your comment (not an avatar, but an image to help in making the point of your comment), include the characters [{fig}] in your comment text. You’ll be prompted to upload your image when you submit the comment. Maximum image size is 6Mpixels. Images larger than 600px wide or 1000px tall will be reduced. Up to three images may be included in a comment. All images are subject to review. Commenting privileges may be curtailed if inappropriate images are posted.

What is eight more than 2?

There are currently no comments for this tip. (Be the first to leave your comment—just use the simple form above!)