Structured settlements are generally created by the purchase of an annuity, often more than one. These guarantee future payments to the claimant and payments may be scheduled in any way the interested parties decide. There are companies that purchase structured settlements but if you choose to keep yours, then in some instances they are paid annually over a number of years or in lump sums every couple of years or so.
The benefit of these is primarily avoiding paying too much tax. If the set-up is structured correctly, the claimant is able to get the best value for money while still meeting their tax obligations, in some cases they may be structured so that the award is completely tax free. In this way the plaintiff's funds will not be dissipated when they are in fact required to pay for care in the future.
In the instance of very large settlements, the plaintiff is generally severely injured and unable to function as a normal working person. They are therefore unable to take care of their needs and a structured settlement can save them from themselves also. Even large settlements can be exhausted quickly and where large sums of money are involved, people, even relatives, what to "share the wealth" even knowing that the injured party has to live on this money for the rest of their natural life.
Settlements can be structured to take care of school needs and later college needs of the plaintiff or their children, and disbursements can be made for any special long-term needs. Lump sums released at specific times can also be used to pay for modified vehicles or updated medical equipment.
In the case of severely disabled claimants, rather than looking at a structured settlement, a needs trust will be set up. A conservator is appointed to take care of this
The benefit of these is primarily avoiding paying too much tax. If the set-up is structured correctly, the claimant is able to get the best value for money while still meeting their tax obligations, in some cases they may be structured so that the award is completely tax free. In this way the plaintiff's funds will not be dissipated when they are in fact required to pay for care in the future.
In the instance of very large settlements, the plaintiff is generally severely injured and unable to function as a normal working person. They are therefore unable to take care of their needs and a structured settlement can save them from themselves also. Even large settlements can be exhausted quickly and where large sums of money are involved, people, even relatives, what to "share the wealth" even knowing that the injured party has to live on this money for the rest of their natural life.
Settlements can be structured to take care of school needs and later college needs of the plaintiff or their children, and disbursements can be made for any special long-term needs. Lump sums released at specific times can also be used to pay for modified vehicles or updated medical equipment.
In the case of severely disabled claimants, rather than looking at a structured settlement, a needs trust will be set up. A conservator is appointed to take care of this
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