A Structured Settlement is an alternative method of compensation in personal injury cases. Instead of accepting a settlement in one lump sum, clients who choose a Structured Settlement receive periodic payments made through a Structured Settlement Annuity.
Structured settlements are better than a cash settlement, because payments are guaranteed for whatever length of time you choose. If you want to receive payments for your entire lifetime, you won’t ever outlive your settlement funds.
Structures are Unique
- They are fixed annuity payments that are free from income tax obligation. Because they are free from income tax obligation, they offer more money over time than a lump sum in most cases. You keep all of your interest gain.
- The payments are guaranteed.
- They eliminate the risk of mismanagement. According to the Rutter Group study, almost 90% of all accident victims dissipate their settlement proceeds within five years of a settlement.
- They provide a steady, manageable income stream to meet ongoing needs.
- They eliminate the expense and worry of managing large sums of money.
“ Congress created Structured Settlements to provide long-term financial security for victims of serious injuries, many of whom are permanently disabled.
Structured Settlements meet the victims’ ongoing expenses for medical care, living needs, and family support. They serve the public good by ensuring that victims don’t dissipate their settlements.”
– Alan Reich, President, National Organization on Disability
Structures have a tax advantage
“Structures” are governed by the Internal Revenue Code (IRC). Under section 104(a)(2) of the IRC, compensation received because of a personal physical injury or sickness is not included in gross income and is therefore exempt from income tax.
No income tax obligation means that you keep the money that grows within the Structure.