After your teen receives a personal injury settlement, you may question if you have access to those funds as a parent. The answer is no. Although your teen is in your care, state laws may prohibit parental use of any monetary settlements until your teen reaches 18 years of age. However, you can help your child plan ahead for his or her future by providing ways to invest the funds, including these below:
Plan for College
As with most teens, your child may decide to pursue a higher education after he or she graduates high school. Because college and university tuition steadily increases every year, the funds from the insurance settlement may offset some or all of these costs.
The one thing you can do is let your teen choose where and how he or she plans to use the settlement, even if it's in another state or country. Remember, the settlement money isn't yours to use or dictate how to use.
Another thing you might do is help your teen find potential schools to attend. By doing so, your child can:
- Learn to actively plan his or her future: It teaches him or her to make great choices early on.
- Estimate how much tuition, books and housing may costs: You can contact difference schools and request information based on their past and current financial trends. The trends may include projected outlooks on books, housing and tuition. This is very important if your child only receives a small settlement. In this case, you can plan out how much financial assistance you need to give with the costs.
- Understand how to manage money and his or her future appropriately: According to MSN Money, 64 percent of parents who have teens worry about their ability to manage funds. You alleviate this stress when your child learns to manage money now and not after he or she becomes an adult.
If your child decides to proactively plan for his or her future education, be sure to support whatever decision he or she makes. Keep in mind that your teen may look for other ways to invest the settlement money. This includes investing or buying real estate.
Plan for Rental Housing or Real Estate
If the settlement is quite large, your teen may decide to buy or invest in real estate property, such as a rental home or land. This may seem a bit much to you, but it may actually encourage your teen to pursue a career in real estate. He or she may also use the rents obtained through the property to pay for college or living expenses once he or she reaches age 18.
Your personal injury attorney may refer your family to real estate investors who understand how the process works. Although your child isn't an adult yet, the information learned from the investors can help him or her devise a plan.
If your teen decides to go this route, he or she may learn more by signing up for real estate classes after graduation. Your child takes the classes online or at a local real estate school. He or she may expect to learn a few things like these below:
- How to locate investment properties: Your teen learns how to invest in different types of properties that may increase his or her future income.
- How to search real estate websites: These websites will eventually provide the real estate leads your teen may invest in. It's important to understand how they operate and how to use them effectively.
- How to hire a property management company: Once he or she establishes a good rental history with tenants, your teen may possess enough income to hire a professional manager to collect rents, make repairs and maintain the property. Learning how to hire a reliable company is key to your teen's future success.
The classes may also teach your teen how to calculate rent fees, do real estate taxes and many other things once he or she gets started.
If you or your child has questions about the settlement, contact the personal injury attorney from a site like http://www.hardeeandhardee.com for more valuable information about it.