Questions and Answers on Structured Settlements

Questions and Answers on Structured Settlements

Q: What are Structured Settlements?

A: If you have been involved with a lawsuit involving personal injury settlements, your attorney may suggest that you consider structured settlements. This is when your case involves settling for a large amount of money, and often the other side’s attorney will offer a plan for you to receive the settlement amount over a hypothesizedv period of time, instead of all at once in a lump sum. The payouts can range from an annual payment over a period of 10 years, for example, to perhaps a payment twice a year. The party who is settling with your regarding your personal injury settlements will buy an annuity which guarantees the complete payment over time.

Q: Would I assistance From Structured Settlements?

A: Avoiding a large tax impact can be one of the main benefits of accepting lawsuit payments by structured settlements. When properly organized, your tax obligations in regard to the amount you have received from the personal injury lawsuit settlement may be reduced, or in some situations may already be tax free. Someone who has been severely injured and will have years of on-going medical care and special needs may assistance from this kind of settlement. In a situation of a wrongful death case where there are young children, structured settlements may be utilized to pay for the cost of college in the future.

Q: What are the Drawbacks of Structured Settlements?

A: You may not borrow against the future payments of your personal injury settlements. for example, let’s say you’d like to buy a home. If you receive an annual payout this may help for your income qualifications on the house, but you cannot access the annuity to put a down payment on the character. The amount of return on the annuity may be less than the amount you may be able to receive if you were managing the complete settlement yourself.

Q:Is it True I Can Sell My Structured Settlements?

A: Yes, this can many times be done. There may be laws or restrictions which will come into play. Certain insurance companies which are handling the lawsuit payments may have restrictions on a sale to a third party. This can be an arena where unscrupulous business are shopping for a good deal, and offer you a low amount, but for a quick payout. Annuity buy outs are not always the best answer, and often may need to be approved by the court. At the very least, seek the advice of your personal injury attorney before entering into an agreement to sell by annuity buy outs.

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