Personal injury settlements are often reached before going to trial. They typically involve a monetary payment from the defendant to the plaintiff in exchange for an agreement to cease all further legal action. Such payments generally come in two forms: lump sums or structured payouts.
A structured payout, or structured settlement, can provide regular payments to the plaintiff over an extended period of time, even the lifetime of a plaintiff if the settlement is large enough. These arrangements can be ideal for people who have suffered catastrophic injuries and are unable to work as a result. Structured settlements are often funded by a defendant’s insurance company and placed into an income-producing annuity.
Annuities are complex investment vehicles that carry various tax considerations, and it’s strongly recommended that plaintiffs consult with a qualified personal injury attorney, tax attorney, or certified public accountant prior to accepting any structured settlement offer. Let us share a few more tips that you may want to know going forward:
Keep in mind that a structured settlement isn’t right for everyone. Lump sum payments may be better suited for cases involving children, for example, as they allow for long-term investing. Lump sums are also advantageous for those suffering from a debilitating injury and requiring immediate medical expenses.
If you or someone you know has been injured in an accident, do not wait to contact an experienced, local personal injury attorney. You are welcome to contact us 24/7 for a free case evaluation to discuss your case, learn more, and determine whether a structured settlement is right for you.