Structured Settlement

A structured settlement is a method used to compensate victims of lawsuit injury cases through a series of predetermined payments. While the regulations and industry practices regarding structured settlements may be similar across the U.S., there may be variations in the exact legal and tax code for each state, so it is important that you consult with an attorney or financial professional who is knowledgeable and well versed in the specific details for your state and for your particular needs. In addition to consulting an attorney, it is advisable that you understand the definition of a structured settlement yourself, as well as how to sell a structured settlement, payment plans and annuities. These arrangements can be very complex, so be sure to get advice from competent legal and finance professionals.

Financial structured settlements were first used in the 1970s when the IRS began allowing a defendant to fund and purchase annuities to fulfill their obligations to injured parties in lawsuit claims. In this period, structured settlements seemed to be used for very large cases involving large dollar amounts. Today, structured settlements can often be used for smaller case or award amounts. Settlement annuities are being used more for many other types of settlement issues including tort cases, medicare, discrimination and employment cases.

People receiving a structured settlement annual cash stream would sometimes rather have a lump sum of money. There are also companies that will buy your periodic payment stream for a lump sum of cash. These brokers will buy and sell your structured settlement annuity payments outright, providing you with a lump sum of cash to use as you prefer rather than receiving the annual payment.

The content on this page is not intended in any way to act as a substitute for professional legal advice. Please consult a Personal Injury Lawyer before taking any action discussed on this page. In particular this page does not advocate proceeding with a structured settlement. Legal advice should be sought from a professional prior to deciding whether it is in your best interest to proceed with a claim either in or out of court.