If you have received a settlement from a personal injury claim, you have many options to consider regarding how you wish to receive your settlement funds. Many injured plaintiffs opt to receive a lump sum settlement, which they can invest or use as they see fit. However, others may wish to consider structuring all, or a portion, of the settlement.
A structured settlement is a financial arrangement in which a person who receives a settlement in a personal injury, or other, lawsuit chooses to receive periodic installments over time, rather than receiving a lump sum payment all at once. Typically, structures are established through the purchase of an annuity from an insurance company, which guarantees the periodic payments. Payments can be tailored to meet the individual’s specific needs, such as covering medical expenses or providing income for life.
Structured settlements can offer several benefits:
- Stability: Regular payments provide financial stability over the long term.
- Protection: By locking in a set payment schedule over time, structured settlements can protect the settlement funds in cases where the individual receiving the settlement has difficulty managing their finances.
- Tax Advantages: In many cases, structured settlement payments are tax-free (an accountant can advise regarding this).
- Court Approval: In cases involving minors or plaintiffs under a disability, where the court must approve the settlement, having a structure in place can ease the process of finalizing the settlement.
The personal injury lawyers at Beckett Personal Injury Lawyers can review your options with you upon settlement of your case and connect you with financial professionals that can provide advice regarding what type of payment plan is right for you.