A Question of Balance
Prior Articles
The ability to balance competing interests is essential in certain situations – just ask me, I’m the father of four. Many of the lessons I have learned at home (the hard way) have gone on to serve me well in my career. In dynamic situations, it helps to establish inherent stabilities or the situation can gyrate out of control in a hurry.
One quick example from the home front: domestic cell phone policy. The rule in our house was that no child got a cell phone until they turned 14. We side-stepped “smart” phones altogether, feeling that voice and text were sufficient. Since we applied the rule evenly to all, the only whining and complaining we endured was strictly garden variety, nothing unmanageable. Not unmanageable that is, until outside influences came into play...
When our third child entered college, her school told us that smartphones were now required because all communications between school, faculty and students would be conducted on such devices. With the school’s thumb on our scales, this kid got a smart phone and there went our equilibrium. Seizing the moment, her older sibling hit us hard with arguments about how greatly her own academic pursuits would be enhanced through the use of such technologies. Then here comes our firstborn’s college graduation and – cha-ching cha-ching – the Family Plan is suddenly loaded up with smart phones.
Not one to fall asleep at the wheel, our 17-year-old high school student then erupted in protestations about the unfairness of it all: his siblings, every one of his friends, and every stranger on the street had smartphones now while he did not. Our “at your age…” logic fell on profoundly deaf ears. We are holding the line for now, but it’s a thin defense and we are taking a pounding.
The challenge of balancing competing interests comes into play all the time in claims resolution. Defendants must balance the possibility of settlement against the costs and risks of a trial. Plaintiffs also have to weigh settlement offers against the risks of trial. Can the lienholders be negotiated down just a bit more to make an insufficient offer workable? How long will this money last at current cost of care and, if not, what will they do once it runs out?
This is where knowing how to “build in inherent stabilities” can make all the difference. Many plaintiffs have immediate cash needs, no question about it. But, handing them $500,000 in cash, when all they really need right now is $50,000, is simply inviting another disaster. It is wildly unbalanced. Being handed $450,000 in cash is a destabilizing event for pretty much everyone. No one handles this well, not lottery winners, not sports heroes, not celebrities, heirs or heiresses.
Worse still in claims negotiations, even though that is a lot of money, many injured claimants don’t know how to value a number that big. It is so disconnected from the amounts they have handled in their lives previously that they aren’t able to make an informed or well-considered decision to settle in the first place. They really don’t know if that is going to be “enough” money or not. They have a lot of stuff they need, a lot of noise in their heads, and a lot of interests competing for that single sum of cash on the table.
Compare that instead to a settlement offer which takes into account the specifics of their situation. How do claimants respond to settlement offers which include identified specific cash needs (credit cards and student loans paid off, new car, roof repair, vacation scheduled, emergency fund established), guaranteed payments to fund future college for children, guaranteed (tax-free) monthly income to cover mortgage, utilities and groceries, and deferred lifetime income beginning at age 65 to supplement an inadequately-funded retirement plan?
They perk right up, I can tell you that. When you cover at least a few of their most pressing needs, the pressure lessens and a vision of life going forward begins to form in their minds. Perhaps they’ll ask us to change things around a bit, skip the retirement fund, increase the cash for down payment on a house; all completely workable. But by crafting a settlement like this, you are building in inherent stabilities which the claimant can plainly see. Perhaps their lives can now return to a semblance of the balance they once knew before their accident.
You don’t have to know how to do all this, of course, that is what we are here for. We are deeply experienced in helping claimants identify their present and future needs and then crafting settlement plans which form a stable balance between those immediate needs and their future financial security.
Do you have a case where the claimant might benefit from a more balanced approach? Contact Frank C. Kilcoyne, CSSC at 800.544.5533, or send me an email at: frank.kilcoyne@jmwsettlements.com. I am here to help.
