[USER]

I might take a settlement offer for my 5 year daughter from an accident she had.
She should end up with around $750,000 into her account after everything.

How should I invest it till she’s 18?

[Megan]

Personally, I would not invest it. You have no idea what kind of investment strategy she will choose as an adult and you may end up investing in companies she doesn’t align with morally or doesn’t want her money going in to.

I say this from experience – I “inherited” some stock from my deceased grandmother in a company I don’t support but don’t want to sell and have a taxable event.

It’s not your money to make choices with, it’s hers, and when she becomes of age and wants to access that money, she’ll likely pay taxes/capital gains on it.

Unless you’re going to offer to pay for some of the tax burden for her, she may not be happy about being saddled with a hefty tax bill (taxes on capital gains of $750,000 is gonna be a LOT) when she thought the money was hers, free and clear.

Your attorney should also be walking you through your options; some courts have requirements for how minor’s settlements are paid out.

I’d put it in a HYSA and let it accrue interest until she’s ready to access it and decide what SHE wants to invest it in.

Yes, you will “lose” time in the market in the next 13 years but she has the rest of her life to make that up.

[Brad]

so personally, id split it up between VOO/VTI/VTSAX (500K), buy 1 bitcoin as well as some XRP (125K), and some real estate (125K) – duplex maybe? some kind of rental.

If you want safe, dump it all into the vanguard tickers I mentioned.

if you want diversity, do all 3. just my 2 cents.

[Michelle]

If it is part of a lawsuit, often the court approval of the settlement will require the funds be placed in a trust and used to purchase an annuity or some other ‘safe’ investment.

There may even be a GAL appointed to oversee the process, depending on what jurisdiction you are in.

Settlements for minors can become quite complicated depending on the type and extent of the injuries.

[Kourtney]

What are the damages/awards for? Like actually broken down.
Will she have lasting medical issues or losses of ability to work/job access as a result of the injury?

[Anne]

My daughter won a settlement when she was under 18 the court sets it up for her.

Your attorney should be helping you with this.

[Noni]

The real question is: did the accident cause a permanent disability?

Will you need to cover medical costs in the next few years?

[Tamela]

Don’t take the first offer. Since she is a kid, you have time to wait it out.

If you wait, you might end up with well over a million dollars.

Don’t ever settle!

[Collier]

My daughter received a substantial amount of money from her grandmothers will.

It’s set up in a trust that dictates how it can be used (mostly college /medical) and at what age she’ll receive the remaining lump sum (30).

Some of it is invested in the stock market and some is in safer investments such as cds.

[Dawn]

Depending on the state your options as a trustee will likely be limited to cd’s or hysa.

Courts typically don’t permit stocks or volatility options with her age likely UGMA.

[Darien]

Stocks and real estate.
High dividend stocks, closed-end funds, yield incomes.

Then buy some rentals and refi

[Jennifer]

Talk to your lawyer and financial advisor about setting up a trust fund with it, partially in high yield savings, and partially in investments.

[Michele]

Hopefully you have a lawyer; the funds will most likely be overlooked by the court system; you will need to open a probate case and a judge will oversee all of the funds so the money will be there for her when she is older.

[Stephanie]

Plenty of good advice here re investing but keep in mind 18 is far too young to have access to what will be such a significant lump sump.

Seek counsel on how to limit access until later in adulthood when it can be responsibly accessed for a home purchase, retirement savings, etc while still providing necessary funds for education, any issues related to her accident, etc earlier on.

[Crystal]

I would seek out a fiduciary financial advisor if you aren’t familiar with investing. I think it would be worth the fees.

That is a very large sum of money which could grow substantially and would also remove the conflict of interest between you and your daughter.

[Sherie]

Also be sure that you don’t lock it up to the point that if you need it for something for her care, you can’t get to it without losing part of it.

[Brad]

PEOPX is a pretty cool index fund that carries a decent dividend. Everyone is different but I like it because it’s an older fund with low volatility and is a solid choice.

There’s a lot of old money invested in it.

[Robert]

That’s a big decision! For investing that kinda money, you might wanna think about a mix of options.

Like, maybe a high-yield savings account for some safety and liquidity, plus some low-cost index funds for growth over time.

Also, consider a custodial account or a 529 plan if you’re thinking about education.

It’s all about finding the right balance, You should definitely chat with a financial advisor too to get tailored advice.

I don’t mind recommending one if you don’t mind so you look him up online and thank me later lol, what do you think?

[Devan]

I would put it in a Roth IRA and then invest in monthly and weekly dividend REITs and reinvest the dividends and let it grow

[Author]

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