NORMAN — During Kentucky Derby week, gambling was at the forefront of my life. Along with non-stop activities in my home state of Kentucky, I spoke at a dinner for the Society of Settlement Professionals in Las Vegas. A film crew flew in from Rome to interview me for a documentary about lottery winners.
My father was a professional gambler, but I went the other way. I help people who get large sums of money hang onto it. Occasionally, our two worlds meet.
I am a mediation and settlement consultant. I attend conferences with injured people — or with an insurance carrier who wants to settle an injury claim — and develop financial strategies to make sure the money that person receives makes their life better.
As I have noted in two books and numerous columns, people who get big money from a lottery often wind up worse off than when they started. The same can happen to injured people. Blowing through a big sum of money can make their situation worse.
I know in the first few minutes of a mediation if a person is likely to blow through their money. Most people give off obvious “tells.”
As Kenny Rogers sang in “The Gambler,” poker players often use body language that signals the kind of cards they have. It’s the same thing in mediations and settlement conferences. I would actually pay the attorneys and clients to bring me to mediations — as opposed to calling when a case is settled — since I can spot problems and make corrections before they get money in their hands.
The son of a gambler, I can spot a “tell” a hundred miles away. Some obvious ones are:
1. People who have a large entourage. Entertainers like Michael Jackson or Elvis are known for attracting a large “posse” of people who want part of their money. The same thing happens to injured people, but their posse usually consists of family and “friends.” The larger the entourage, the more likely that one of them has their own agenda for the money, especially if the posse includes someone with a controlling personality or a new “love” interest.
One of my first moves is to throw the “posse” out of the room when we talk about money. It’s horribly sad to see someone who is severely injured or who has lost a loved one in an accident. It’s even sadder when others get their hands on the settlement.
2. Another “tell” is someone who has already spent the money before they’ve gotten it. I’ve seen people borrow lots of money and order expensive items before the case is settled. It’s not unusual for these people to have unrealistic expectations as to what they will receive.
An easy way to combat that is to show them published verdicts and settlements from situations similar to theirs. Just because a friend of a friend heard about someone who got $50 million for a bad paint job on their BMW does not mean it is going to happen to you.
3. If someone does not handle money well before a settlement, it is going to get worse when they have more money, more decisions and more people wanting part of what they have.
I go through a simple, informal checklist of where a person is financially. Do they have a lot of credit card debt or seem to always be running behind? If so, what can we do to prevent that from happening? There are a number of mechanisms such as trusts, structured settlements and other ways to control money at the time of settlement — to protect someone from himself or herself.
4. Are people clueless about possibly losing government benefits? A number of health care-related programs are designed to help injured people, and the Affordable Care Act promises many new ones. But if someone is not diligent about protecting the benefits they have, they will not be diligent about protecting any settlement award.
5. Finally, my biggest tell is the “lottery question.” I’m usually introduced as a lottery expert, and I ask people what they would do if they won the lottery. Those who have a well thought out vision, such as educating their children, buying property or giving back to society will do well when they have a smaller sum. Not having a vision is a major league “tell.”
As the song says, “You’ve got to know when to hold them, know when to fold them, know when to walk away and know when to run.” Looking for “tells” is a good way to find out which work best.
Don McNay is a colunist for the Richmond, Ky., Register. Contact him at donmcnay.com.