What is a Structured Settlement?

A structured settlement is secure and innovative option to compensate injury victims versus taking the entire settlement amount in one lump sum.  Prior to 1982 physical injury settlement funds were payable only in the form of a single lump sum, unfortunately the large majority of plaintiffs exhausted their money very soon after settlement.  Recognizing this issue Congress passed the ‘Periodic Payment Settlement Act’ (Public Law 97-473) which enables injury victims to utilize structured settlement annuities for all or a portion of their settlement.  Structured settlement annuities provide guaranteed tax-free payments, providing financial security and stability while avoiding the risks of financial loss or mismanagement of settlement funds.

Structured annuities can be designed to meet virtually any type of immediate and future need – lifetime payments, monthly living expenses, ongoing medical needs, retirement planning, college tuition, or other financial concerns.  The annuity payments are placed with the highest rated life insurance companies in the U.S. and are designated tax-free for injury cases by IRS regulations.   Regardless of the injury or settlement amount, structured annuities can be beneficial to the plaintiff’s future.

 Physical Injury

Making long-term decisions during the settlement process can be overwhelming. Structured settlements can alleviate some of the stress by addressing specific financial needs and giving the injured party peace of mind.  Cases involving physical injury such as an auto accident, catastrophic injuries, wrongful death and workers compensation are exempt from state and federal income tax.  By utilizing a structured annuity to customize payment streams we can provide financial security and give the plaintiff freedom from the burden of making continual investment decisions in the future. 

A structured settlement can be ideal for a number of injury cases and should always be considered in cases involving injured minors. Most Judges and Courts are advocates for a structured annuity because it safeguards against frivolous decisions when the minor turns 18 and has access to the settlement funds. Instead of one lump sum, a series of payment streams can be designed to help college tuition, living expenses during school, with future medical needs or life events such as or purchasing a home.

Regardless of the settlement amount structured settlement annuities provide the security and stability injury victims deserve.