Toby and Alice
Toby had been married
to Alice for 47 years. One
afternoon while driving home from the supermarket, a load of lumber broke loose
and fell off the tractor-trailer immediately in front of them. Swerving to avoid the splintering wood, Toby lost control of the car and
it left the road, glancing hard off a concrete abutment before coming to a rest
in a culvert. Toby suffered facial
cuts and a broken nose and wrist. Luckily,
Alice was unhurt.
When it came to
settlement they found they really didn’t have any pressing financial concerns. They had lived modestly, raising their children comfortably on Toby’s
wages as a machinist at a farm equipment manufacturer where he had worked his
entire adult life.
Fortunately, Toby’s
long career at the company had earned him a solid pension and they had paid off
their house years ago. So when the
trucking company’s insurance company offered him $50,000 to settle his claim,
it was more than sufficient and he didn’t really know what to do with the
money. The claim representative mentioned the benefits of
structuring the settlement and they discussed ideas suited to Toby’s
situation. Not needing the money
himself, he decided to do some nice things for his wife and grandkids.
First, he set aside
$5,000 in cash to take Alice on a lavish cruise through the Caribbean.
Next, he set up a
stream of annual income that Alice could not outlive. (While he had already
outlived both his parents, Alice’s lived well into their 90’s and he wanted
to be sure she had no worries.) $33,000
committed to this goal produced an added $385 a month beginning in five years,
guaranteed for as long as Alice might live.
Lastly, he set up
annual installments of $1,000 every December 1, guaranteed for twenty years to
serve as a “Christmas fund”. While
he planned to enjoy every year he could, he named his grandchildren as secondary
beneficiaries for any guaranteed payments that remained upon his death. If he couldn’t stick around, he wanted to be sure his grandkids still
had an extra-nice Christmas long after he was gone, courtesy of their “Bapa”.
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