Personal Injury Attorney Ben Schwartz answers a viewer question. “I settled a personal injury case, after attorney’s fees and expenses, I deposited almost sixty-five thousand dollars in my bank account. Now I received a phone call, the bank wants to meet now that I deposited my settlement money, should I go for that meeting?”
Hi, I’m Attorney Ben Schwartz,
Today we are going to take a viewer question, this is from Kevin in Baltimore, Maryland. Kevin wrote in and he said, “I settled a personal injury case, after attorney’s fees and expenses, I deposited almost sixty-five thousand dollars in my bank account & now I received a phone call, the bank wants to meet now that I deposited my settlement money and should I go for that meeting?” I think it is a great question & I think not only applies to people that get sixty-five thousand dollars out of a settlement, it is a question that I think applies to people who get smaller settlements, maybe a settlement of ten thousand dollars, were you net something like six thousand dollars out of the settlement or a settlement of hundreds of thousands of dollars where you’re getting hundreds of thousands of dollars out of the settlement.
It’s a good question that applies in many, if not most, personal injury cases. Here are my thoughts on this. When the bank wants to meet with you because they see that you made a large deposit, their purpose for wanting to meet with you is not necessarily to help you protect your money. Their purpose in wanting to meet with you is because they’ve identified you as a possible customer for one of their investment products.
So, for example, maybe they’ve got a long-term CD that they want to sell you. or perhaps they have a credit card that they want to place in your hands. They have some reason for wanting to meet with you to put a product in your hand or put a product in your account and the product they’re looking to sell you may be something where they’re going to generate a great fee off of it. I don’t know about your return on your investment, so I would say there are good things about this meeting with the bank and there are bad things about this meeting with the bank. The good thing about meeting with the folks from the bank is if you’ve got sixty-some thousand dollars sitting in a savings account, it’s not really generating much in the way of interest. You probably ought to do something to invest that money a little more wisely in a safe account that’s going to produce a better return on your investment.
If you have money sitting in a bank account, if you’re like most people, what you’re going to find is that bank account balance will quickly diminish. I have had many clients that I’ve told this to. I’ve had many clients where I’ve said, “you’ve got to find some investment for it. You’ve got to find some way to protect it.” Then they come back, I see them two years later and they say, “Oh I ran through the money in no time flat.”
So, what you need to do is, you need to do something to stop yourself from spending the money. Taking a meeting with the people from the bank is not a bad idea. I would say the downside to taking a meeting with the people from the bank is the investment that they’re going to sell you may not be the best investment for you and your particular circumstances.
I would say that if the bank has called you and said let’s have a meeting to discuss the sixty-five thousand bucks that are just sitting in your savings account, I would say instead of taking the meeting with the people from your bank, what may be the thing to do is to try and find an investment advisor who charges by the hour for giving investment advice, then go to the investment advisor to try and get some advice on what kind of investment you could make with your money that will tie-up the money so that you can’t fritter it away, but at the same time will give you a positive return on your investment. You want to make the highest return on your investment that you can be given your risk tolerance.
So, for example, the investment advisor may tell you if you are 22-years old, you have a high tolerance for risk because if you lose the money it’s not the end of the world, so you may find the investment advisor gets you a higher risk investment that has a higher return. If you’re 75-years old and you’re going to need that money in your retirement, maybe the investment advisor is going to get you a low-risk investment, but that investment may also have a low return. These are things for an investment advisor to you to talk to you about not for a personal injury lawyer to talk to you about.
So that is my two cents. If you’re in this situation and you just put a big lump sum in your savings account, the bank people want to meet with you to talk about what you’re going to do with it, I see the good and bad in the situation. Good because they can help you tie up the funds, so you don’t fritter them away so you don’t waste that money. The bad is that the investment vehicle or the investment product that they sell you may not be the investment product that’s in your best interest to buy. It may be the investment product that is in the bank employees’ best interest to sell you.
I would say get an independent investment advisor who’s not working on a percentage basis, but who’s working on a fee-for-service basis, an hourly basis, get some good investment advice from that person instead. I thought it was a great question, Kevin. If you are watching this video and you have questions for me about the law, particularly personal injury law or litigation, please feel free to send me an email below. Thanks for watching!