The auto insurance company is offering 0.8M for on-fault settlement in my 7-yr old son's case, while the no-fault is still ongoing, and we have 3 choices to accept this settlement. (we are in Ontario, CA)
1) Lum sum, and the court would hold the money until my son's 18'th birthday, and the current interest rate is 3.25%, so by the time of my son's 18'th birthday, the court would give my son a big cheque which would be around 1.1M.
2) Structured Settlement, which is our lawyer suggested, and we consultanted one broker (McKellar) and the best quote from life insurer is to guarantee CPI indexed $15,000.00 buying power for my son's life time, which is the most safe way to guarantee stream of income, the amount of income is really not attractive but it's tax free.
3) Trust, setup a Trust and invest / manage the 0.8M by ourself, which would definitely generate higher gross income, but considering the Trust tax (40%), incoming tax, fund management fee, etc, it's hard to balance pros and cons.
I've been brain squeezing for weeks to find out a solution for my son, cause it's for his whole life. Would anybody like to share your experience with me? and I really like to hear your suggestions and recommendataions, thanks in advance.