Case Study: PHOEBE FILMORE

Phoebe was 12-years-old and playing at a neighborhood friend’s house when she was singled out and attacked by two angry dogs that had escaped from a nearby home. Her friend ran for help, but Phoebe sustained serious injuries including lacerations to her neck, face, and arms. Phoebe was rushed to the hospital, treated, and released several days later. The next few months involved nine different dates with surgeons and nine painful recoveries. The negligent owners of the dogs were clearly liable for Phoebe’s injuries but they were financially unable to provide much help. They did have a homeowner’s insurance policy that agreed to pay the policy limit of $300,000. After settling all of the medical liens and paying the attorney, Phoebe had netted about $180,000. Her parents discussed several options for structured settlements at the time of settlement. They decided that they wanted to pay for Phoebe’s college themselves and that this money should be paid to her in a series of lump sums after she had finished her education. They had reasoned that they had always planned to pay for her college education and that this money should provide her with funding for the transitional years thereafter.

After settling all of the medical liens and paying the attorney, Phoebe had netted about $180,000.

Unfortunately when Phoebe was finishing her senior year of high school, her father unexpectedly lost his job when his entire industry suddenly disappeared due to the global economic crisis and intense global competition. Phoebe had already applied and been accepted to the top university in her state. Due to the difficult circumstances, the family was forced to deplete the savings they had managed to accrue for her education to make ends meet. They began looking for other methods of financing Phoebe’s education. After exhaustive research they discovered that they could sell the right to receive the structured settlement annuity payments. They called a company they found on the internet who quoted them a price of $90,000 for all of the future payments. This would provide enough to fund Phoebe’s education, but did not seem like a smart financial decision.

Frustrated, Phoebe and her parents went in to see the personal injury attorney who had represented Phoebe five years earlier. Their attorney called the settlement planner who had helped them design and fund the structured settlement annuity to see if she had any ideas. The settlement planner recommended that they conference in Rhonda Bentzen of Bentzen Financial. They were pleased to discover that Rhonda was professional and sympathetic to their situation. It was a sigh of relief to everyone that Rhonda was on the case. She told them right away that she could beat the prior quote by at least 30%, but that she thought selling all of the future payments was a bad idea. Rhonda made an appointment with Phoebe and her parents to meet again the next day.

…the structure was left intact to help Phoebe in the future and enough money was raised to put her through college without causing unneeded financial stress on the family.

The next day, Rhonda suggested that they try to conference in a financial aid officer from the university. After discussing the matter with the financial aid officer, everyone had a better understanding of how much money would be needed. Rhonda called later that day with a carefully crafted plan which involved taking the maximum amount of student loans that Phoebe could qualify for each semester, knowing that the first lump sum from the annuity would be available to repay the loan as soon as Phoebe finished college. Rhonda’s plan involved raising the cash needed to fund the rest of the college expenses by selling just one of the remaining large lump sums. In this way, much of the structure was left intact to help Phoebe in the future and enough money was raised to put her through college without causing unneeded financial stress on the family.

Rhonda’s team helped smooth the process of selling the lump sum. There were papers to sign, notices and disclosures were exchanged, and a court date was arranged. Rhonda hired and paid an attorney to guide them through a short hearing at their local court house. The judge, known to be an active consumer advocate, was at first skeptical of the wisdom of selling structured settlement payments. However, when he saw the thought that had gone into the plan and the reasonable discount Bentzen Financial was able to offer, he realized that the sale was in Phoebe’s best interest. He was so impressed that he asked for Rhonda’s contact information for future referrals.