Structured Settlements - A Good Idea? | Elite Lawyer Blog

A structured settlement gives the victim of a personal injury systematic payments for a specified period of time, such as a certain number of years or for the duration of the victim?s life. Structured settlements are often created through the use of an annuity policy which provides a steady income over the annuity?s term. The funds generated from this financial tool can be used to pay for expenses that are associated with the injury and expected to be incurred. A personal injury group can help explain the advantages and disadvantages of having a structured settlement.

A structured settlement provides many advantages to victims of personal injury cases. Some of the advantages include:

• Annuities are tax-free when they are controlled by someone other than the plaintiff.
• Having a structured settlement prevents a plaintiff from using a lump sum payment quickly and recklessly.
• Professionals manage annuities, providing a level of financial planning that most victims do not utilize. The professional can ensure that funds are used for the expenses that the victim needs to pay.
• Annuities are flexible and can be created to address the victim?s particular needs and to anticipate future financial obligations.
• Insurance laws provide coverage for an insurer who is bankrupt.
• Annuities can be used in conjunction with a lump-sum payment so that victims can pay off expenses that have rapidly accumulated and also receive structured payments for the remainder of the award.
• Funds can be reserved in case better medical technologies are discovered to help treat victims? illnesses and injuries.
• Structured settlements may make it easier on the defendant to pay so that a settlement can be reached between the parties more easily.

Structured settlements can be very advantageous for victims, especially for individuals who have sustained catastrophic injuries and anticipate having significant medical expenses and financial hardships for years to come. However, structured settlements do also have a few disadvantages. A skilled personal injury group can point out some of the drawbacks of structured settlements, including:

• The victim can lose the tax benefit if he exerts too much control of the funds.
• Inflation can reduce the effectiveness of regular payments.
• Some financial planners may not acquire an annuity that offers proper protection against potential insolvency.
• Annuities may be less expensive for defendants to purchase than paying a lump-sum settlement to a victim. This situation can cause a skewed view of the value of the claim and an attorney may not be able to perfectly assess if the annuity provides an adequate amount of compensation for the victim.

If you would like more information about structured settlements, contact a skilled personal injury group for valuable advice regarding the options that are available to you. The Elite Lawyer Project personal injury lawyers listed on this site provide a free and confidential claim review.

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Source: http://www.elitelawyerproject.com/blog/structured-settlements-a-good-idea/

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