Structured Settlement

A structured settlement often provides the plaintiff with a serious tax benefit. If the plaintiff doesn’t control the account, monies received from an annuity are tax-exempt.

Individuals receiving lump-sum settlements generally spend all their money within five years. Then many become dependent on third party support. A structured settlement preserves funds for later or extended needs and periods of time. Structured periodic payments can be combined with one or several lump-sum payments to meet expenses such as medical bills, debts, rehabilitation costs, education, etc.

Often settlement recipients treat a lump-sum settlement like a cash windfall. As with lottery winners, this may encourage money management problems. Annuities payout are tailored to cover the plaintiff's specific current and future needs.

In most states, annuities are protected by state laws that guarantee that obligations of a bankrupt insurer are covered.

A structured settlement may make a good settlement possible for parties separated by significant distances.

Also look at: Structured Settlement Payments