A Primer for Structured Settlements

You may not be aware of what structured settlements are or how they can be an essential ally in the face of personal tragedy. The team at American Settlement Corporation wants to fix that by giving you the information you need to make the best decision for the present and the future when you have received a monetary settlement.

Traditionally, when someone receives a settlement due to injury, disability, or loss of life, it is 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. Many of us are not experienced enough to handle this kind of long-term financial planning. This leads to many opportunities for mismanagement and theft, resulting in a devastating loss for the family.

With a structured settlement, you are able to turn that monetary settlement into much-needed financial security. Once the compensation 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 needed and no longer has to continually worry about whether or when the settlement money 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.