What Is A Structured Settlement?
At one time, personal injury and workers’ compensation claims were only settled with the exchange of a lump sum of money. Regrettably, cash-only settlements that are thought to continue for decades tend to be drained in a couple of decades. A structured settlement is a settlement option that was designed in reaction to this outcome; it provides greater security and certainty to individuals made vulnerable by trauma. Even though a traditional injury settlement is made up of one-time sum of money, a structured settlement generally includes cash at the time of settlement to cover immediate costs, and guaranteed periodic payments customized to satisfy the needs of injured individuals and their families for years to the future. Structured settlements would be the best method to ensure a strong financial future for all parties involved.
What person needs can a structured settlement address?
Lost wages Medical expenses and equipment Rehabilitation and training Funds for children’s education Retirement income Home modifications Anticipated special purchases Funding for memorials and scholarships
Why select a structured settlement?
Individualized financial choices: Payment flexibility permits parties the freedom to tailor obligations to meet present and future needs. A structured settlement can make payments for a specified period of time, or can last an whole lifetime. Payments can be made monthly, annually, or at all intervals best address a person's needs. Payment amounts can be corrected or may rise over time. Stability and safety: Structured settlements provide unmatched protection against future loss or dissipation of funds. Folks don't have to be concerned with making a single payment last a lifetime. Tax-free income: Payments received in the settlement of physical injury and workers' compensation cases are completely tax-exempt at the national and state level, whereas investment earnings out of all-cash settlements are usually taxable. Capital Protection: Unlike traditional investments, which can lose money with the fluctuation of financial markets, structured settlements provide protection from economic instability in an unpredictable economy. Low risk: Going to trial involves significant risks to all parties involved, and the time and cost of litigation can be a significant burden. Structured settlements permit the parties to author their own futures without the unpredictability of a trial. Professional Money Management: Every highly-rated financial establishment has a group of professionals to manage the assets in a structured settlement. Must Recommend - Historical Review of Changes Affecting Structured Settlements A more secure future: one woman’s story A 45-year-old woman is hurt in a multi-vehicle accident. She's still able to operate but is concerned about future medical care due to her injuries. As Opposed to settling her claim for a single $100,000 payment, she chose a structured settlement offering the following: $50,000 money at settlement to pay for her attorney fees and costs, medical bills plus immediate money to her, to repay a credit card and place a deposit on a home. $1,500 paid annually for 10 years, then $5,000 paid annually for the duration of her life. The entire expected payout to her based on a normal life expectancy is $195,000, a considerably larger payout than the lump sum, and timed to meet long-term needs. If the Claimant lives beyond a normal life expectancy, the yearly payments continue for as long as she lives. The structured settlement provided this Claimant reassurance and secure, tax-free income for life. Read the full article
