A structured settlement is often times the result of a personal injury case. When a plaintiff settles for a large sum of money, the result can be a settlement being paid in installments over the course of many years, as opposed to a single lump sum.
How Are Structured Settlement Payments Scheduled?
What is the schedule for a structured settlement? This is a detail that is worked out by the plaintiff, defendant, and their lawyers. For example, a structured settlement may be paid out once per year for several years. Payments can also be made once a month for a shorter period of time. Structured settlement payments can be scheduled for any length of time.
Pros and Cons of a Structured Settlement
If you have a personal injury case, it is safe to say that your attorney is going to talk about the benefits of a structured settlement at some point in time. Consider both the pros and cons before making a decision for or against this. Here are a few of the pros and cons:
- Settlement payments are protected: In most cases, the plaintiff is protected, even if the defendant files bankruptcy before paying off the structured settlement.
- Tax benefits: Structured settlements are often tax-free, which can provide many tax benefits to the plaintiff.
- Flexible options: Negotiations can lead to a flexible payment option that includes a large payment, followed by monthly payments.
- Dedication of the funds: Plaintiffs can dedicate certain funds to future medical needs, which can allow them to continue receiving medical care for life.
- Less opportunity to invest: Structured settlement payments may not be as useful to a younger plaintiff who could have invested that money.
- May not meet current financial needs: Monthly payments can make it difficult to cover a large amount of debt already incurred due to the injury.
- Risk of inflation or increasing monthly needs: In some cases, monthly payments may not keep up with inflation or the increase in cost of living.
- Inability to cover large costs: Some people may want to make changes, like in their careers, following an injury, which would require more costs upfront.
These are just a few of the potential pros and cons that come with a structured settlement. It is important to discuss these with your injury lawyer to decide what payout is best for you.
Do I Need a Lawyer for a Structured Settlement?
You may consider working with a lawyer if you have been offered a structured settlement, as they can offer many useful resources. Personal injury attorneys are all too familiar with structured settlements. If you have a case, the end result may be a structured settlement. There is nothing wrong with this payment method, as long as you are comfortable with the details.
A lawyer can help you calculate the value of your case and determine if the structured settlement is a fair payout. We encourage you to reach out to us today to discuss your injury case.