You have been injured and the court has awarded you a structured settlement. You know nothing about what a structured settlement so you need to do some research to find out what a structured settlement entails.
Did you get awarded a structured settlement because you had to take someone to court because you got injured because of negligence of that individual or corporation? Did the subject you sued offer to settle out of court? You will find with a structured settlement will come choices that you will have to make.
You might think that when you are awarded any amount from the defendant, that you will walk away with a check in that amount. That is one option or choice for you to make if given that choice. However, the judge may award you a structured settlement in which you will receive installments on the initial amount. Depending on your circumstances, this may be the ultimate way to go.
What happens when a judge orders a structured settlement? Usually the person or corporation that lost the suit will go and purchase an annuity from an annuity company or an insurance company. The annuity or insurance company then in turn pays you installments based on specifications that you and your lawyer stipulate in the structured settlement case.
The installment payments can be tailored to meet your needs. You can receive them in an annual payment. You can also set up more complex arrangements by receiving part of the structured settlement award in part as a lump sum payment and then having the rest sent to you on a monthly basis. Sometimes there are provisions added to the structured settlement that will also address and allow for future medical expenses above and beyond the settlement amount.
What are the advantages of a structured settlement? The biggest advantage is that you will have a steady income coming in. Another advantage is the taxation issue. You may be able to avoid the taxes if you want to receive installments. Yet if you choose to take the lump sum and reinvest it you could be responsible for taxes on the interest that you accrue over a period of time.
Are there any negatives to receiving a structured settlement? There are a set of negatives that come with everything. A structured settlement is no different. Once you agree to the structure of the structured settlement, there is no turning back. It is legal and binding. That is why it is necessary to have an attorney and a financial advisor help you with setting up a structured settlement.
The attorney and financial advisor can help you by setting up the structured settlement so that you are protected from inflation. They can also see that it is structured to meet your needs. If there is a chance that you think you will not live to receive the full benefit amount, an attorney or financial advisor may be able to see to it that your family will continue to receive the benefits that you would have received.
You may choose to accept the installment payments of your structured settlement, but at a later date you decide that you need a large sum of money and want to sell all or part of your structured settlement. When this happens you will need to locate a structured settlement buyer. That buyer will present you a quote for the value of what is left of your initial payment.
Selling your structured settlement is completely up to you. Perhaps though you should question yourself about the reasons for selling it. Once you receive the lump sum that you sought out are you going to run off and spend that money foolishly until the money is all gone? Is the money going to go to a child’s college tuition? Are there medical bills that need to be paid? Are you going to use it to pay off the mortgage?
So now you know some basics about structured settlements. Hopefully you will be able to take this knowledge and make the most of your structured settlement and make it work for you.
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