Structured Settlements

A Primer

A structured settlement can be an important ally in the face of personal tragedy. When someone receives a settlement as a result of injury, disability or loss of life, it is traditionally paid to the claimant in one lump sum. At that point, the responsibility of administering the money to last the duration of recovery, or even life, lies with the claimant—and many of us are not experienced enough to handle this kind of long-term financial planning. There are many opportunities for mismanagement and theft that can result in a devastating loss for the family.

Structured settlements are a proven, effective way to provide much-needed financial security. Once the settlement is received, a plan is created that dictates when and how the tax-free funds are distributed. Payments can be fixed or vary depending on the care requirements of the claimant or the family. Thus, the claimant receives money when it is needed and doesn’t have to continually worry if and when it will run out.

Structured settlements can be voluntary or required by law depending on each individual situation. Pre-trial settlements are common and typically result in the claimant deciding whether or not they want a structured arrangement. If the claimant is a minor or an adult deemed incompetent, a court-ordered structured settlement is a probable outcome.

So, when is it best to consider a structured settlement? And what are the specific advantages to creating this kind of plan? Please read on for the fundamental uses and benefits, or feel free to contact one of our associates to discuss your personal situation.