Have you ever sued someone or a company because their actions permanently hurt you either accidentally or maybe even intentionally? Did the decision or settlement benefit your case? Apparently, there are several ways of payment that can be done. You need to understand all your options including structured completion.
Usually, when the verdict is in your favor, the defendant is ordered to pay the amount of the verdict in one payment in full. Say, for example, you have a form of cancer that is caused by an insecticide. You sue the insecticide manufacturer, who agreed to settle out of court for a million dollars. You get a check for a million dollars, right?
You may receive a lump sum payment but it may be more financially savvy to accept an installment plan called a structured settlement. Installment payments are creatively arranged to best meet your long-term financial needs while protecting you from inflation. They can range from simple annual payments to complex arrangements consisting of an initial lump sum payment, indexed monthly installments, deferred payments, and special provisions relating to future care or death of the insured. Usually, the person or company that is ordered to pay will purchase the annuity (from the annuity or insurance company) for a one-time payment. The annuity will pay you regularly scheduled income on a schedule with structured settlement terms. Let’s take a look at the advantages that structured settlements offer. The big advantage is that you are guaranteed a source of income until the day you die. The main advantage is that it reduces your tax liability. You will be able to substantially deduct taxes on any investment income that would otherwise have been earned on a lump sum settlement investment.
There are some negative things that you need to be aware of. First, once you’ve agreed to it, you can’t change the structured completion terms. So obviously it’s very important to have competent attorneys and tax advisors who are experts in negotiating structured settlement terms that meet all of your current and future needs. If you don’t expect to live long, for example, you may want a settlement that includes a minimum payment even if you die before your guarantee expires. This will provide your family or other beneficiaries of being left without financial resources. While structured solutions are not the right tool for everyone, they can make life a lot easier depending on your needs. You should consult a qualified attorney to help you decide if a structured settlement is appropriate for your circumstances.