If you have won a personal injury case, your settlement check doesn't have to reflect a lump sum payment for your damages. You can opt for structured settlements, which is designed to spread your settlement into multiple payments spread over a predetermined period. Here are some of the reasons you should strongly consider the structured settlement format:
You Won't Spend the Money Too Fast
One of the best things about structured settlements is that they save you from the risk of spending your settlement money too fast. This is particularly a big advantage for those who don't have good money management skills and experience. If you get your settlement all at once, you risk blowing it up within a few months and then having to suffer, especially if your injury has severely affected your earning capacity. You don't have to worry about this if you opt for structured settlements.
You Will Be Protected From Your Creditors
A structured settlement is a form of annuities, which is backed by life insurance companies or investors. The good news here is that, in most states, annuities are protected from creditors. Therefore, you won't have to worry about creditors carting away your precious settlement money if you opt for structured settlements. Note that there may be expectations to this rule so you should consult your lawyer and get a clarification before using it to decide whether to accept structured settlements.
You Will Enjoy Some Tax Benefits
Personal injury payments are generally shielded from the tax authorities. However, the money you earn (interests and dividends) from the settlements taxable. If you accept a lump-sum payment and keeps it in a savings account or a passive investment, you will have a considerable tax obligation every year because there will be a lot of money sitting in your account every year. However, when you opt for structured settlements, you may still pay some tax on the interests, but your tax obligations will be lower every year. This is a form of deferred taxation that has several benefits.
You Can Tailor It to Your Specific Needs
Lastly, another benefit of structured settlements is that you can tailor it to suit your unique financial needs. For example, if you are planning to go back to school in a few months, you can design the payments in such a way that you will get substantial payments around the time you will be enrolling in school. This is possible because structured settlements don't have to be of equal amounts.
Contact personal injury law firms to learn more.Share
30 March 2021
When I started my first small business, I had no idea how much I really didn’t know. I was fully prepared to deal with customers, sell product and even handle complaints and returns. What I wasn’t aware of was that there is so much more to it. I was lacking the legal expertise to protect the company and myself. I wanted others to benefit from my experience, mistakes and lessons learned, so I started this blog. From employment law to the legal business contracts you’ll have to sign when you form partnerships, business law is complex. I hope that the information here will help you to be better prepared when you start your business so that you’ll know when you need to call an attorney and when you can handle things yourself.