This year, we’ve been working closely with a large group of legal settlement recipients. Each claimant is receiving a sizable payment, allocated based on the degree of harm they experienced. Most have been living below the poverty line, and these settlements could be life-changing. Many currently rely on government assistance such as Supplemental Security Income (SSI), Medi-Cal, food stamps, and housing aid.
To support them, we’ve been providing complimentary financial planning guidance—answering questions about how to protect and maximize these funds.
As these conversations unfolded, we realized that the information we’ve shared could benefit anyone who suddenly comes into wealth—whether through a settlement, inheritance, or business success. Below are some of the most common questions and answers from our consultations. We hope this helps you or someone you care about make informed decisions:
Should I deposit cash in a bank or credit union?
Either option can work well—what’s best depends on your personal priorities.
Credit unions are nonprofit institutions. Because they don’t aim to generate profits for shareholders, they often offer lower service fees, more favorable loan rates, and higher interest on savings. Members often report feeling a stronger sense of community and more personalized service.
However, not everyone qualifies for credit union membership, and their technology or services may feel more limited. They may also have fewer ATMs and branches. Credit unions are insured by the National Credit Union Administration (NCUA), a federal agency similar to the FDIC.
Banks, on the other hand, are for-profit institutions. They generally offer more robust services, greater access to ATMs and branches nationwide, and a broader range of investment options. However, their service fees can be higher, and customers may feel less of a personal connection. Banks are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 per depositor, per institution.
When choosing between a bank and a credit union, consider what matters most: convenience, customer service, fees, interest rates, or available services. Choose the institution that aligns best with your needs and goals—and feel confident in that decision.
How do I keep my money safe while still earning something?
You don’t need to invest your funds right away. In the short term, you’ll want to keep your money safe and accessible (liquid) while making longer-term plans.
Start by setting up accounts for:
- Everyday expenses (e.g., groceries, bills)
- Emergency savings (ideally 6–9 months of living expenses)
These should be checking or savings accounts—they won’t earn much interest, but your money will be secure and easy to access. Speak with your bank or credit union about the right mix of accounts for your needs, and feel free to compare options at multiple institutions.
If you have funds you won’t need for a while—such as a future down payment—you might consider a Certificate of Deposit (CD). CDs offer a fixed interest rate over a set time period and are a safe way to grow money you don’t need right away. Ask your institution about available CD rates and terms.
Should I pay off my debt (e.g., Student loans, mortgage, credit cards)?
It depends. If your debts have high interest rates, paying them off could save you money and reduce stress.
However, if your loan has a low interest rate, like some mortgages, it may make sense to keep it and invest your funds elsewhere. More importantly, don’t pay off large debts if doing so leaves you with too little cash for daily needs.
Ask yourself:
- How much does this loan cost me monthly?
- Is it a significant financial or emotional burden?
- What would I do with the money if I don’t pay it off?
- Evaluate each debt in the context of your overall financial picture. If you're unsure, consult a trusted advisor before making large repayments.
What should I do with the money if I want to invest more aggressively for the long term?
There’s no one-size-fits-all answer. Some people prefer DIY investing using online platforms. Others work with their bank’s investment services, and many seek out a dedicated wealth advisor for long-term planning.
We recommend researching your options and talking with someone who can explain the pros and cons of each approach. If you'd like, we can help point you in the right direction—or provide guidance ourselves. As fiduciaries, our responsibility is to act solely in your best interest.
Whom can I trust when it comes to securing and managing my money?
Be cautious. Even well-meaning friends and family members may not be qualified to give financial advice.
More concerning are those who ask to borrow, invest, or manage your money. These situations require careful scrutiny. A sudden windfall can attract opportunists, so trust—but verify.
If you hire a professional, look for someone who has a fiduciary duty to you. This includes:
- Certified Financial Planner™ (CFP®) professionals
- Registered Investment Advisory (RIA) firms
These professionals are legally required to make recommendations that are in your best interest—not theirs. Don’t rush into any decision. Take your time, ask questions, and be selective.
Suddenly having money—especially for the first time—comes with important decisions. The right choices today can set you up for lasting financial stability. While we’ve covered just a few key topics here, every situation is unique.
We believe everyone deserves access to sound financial planning, regardless of their background or net worth. Whether you’ve just received a large sum or are simply starting to build wealth, we’re here to help.
Reach out to us for a consultation. When individuals make smart financial choices, the benefits extend beyond their households—they strengthen our communities and our country.