What Is a Structured Settlement?

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The most common way to settle a personal injury case is via one lump sum payment. However, structured settlements can be appropriate in some circumstances.

A structured settlement consists of one large initial payment to the plaintiff and his attorney right after the case, followed by smaller payments to the plaintiff over a period of several years. In some cases, a structured settlement may be good for lifetime payments.  structured settlement

Advantages of a Structured Settlement

After a personal injury case is resolved, you may worry about spending the money you receive too quickly. If so, a structured settlement can be a good option because your payments will arrive at set intervals instead of as one large windfall. The terms of the settlement can even be negotiated to provide payments to your heirs if you die before the end of the structure.

Accepting a structured settlement can also save you money on your taxes. Income from a personal injury settlement isn't taxable, but you will need to pay taxes on interest and dividends from your settlement investments. With a structured settlement, you'll have fewer taxable investments. 

Disadvantages of a Structured Settlement

The biggest disadvantage of a structured settlement is that you may need your funds immediately to pay off your medical expenses. You might also want the money to upgrade your home to meet your accident-related physical limitations or to start a business that will allow you more flexible working conditions.

Additionally, structured settlements carry an element of risk that's important to consider. If the company paying your structured settlement goes out of business or declares bankruptcy, you're left with no way to collect your money.

Consult Your Attorney

Every personal injury case is unique, so it's important to consider all of the variables involved before deciding what type of settlement is best. A skilled personal injury attorney can answer any questions you have about the implications of accepting a structured settlement.

Have You Suffered A Personal Injury Due To Negligence Of Others?

If you've been injured you need to speak with an experienced personal injury attorney as soon as possible. Please contact us online or call our Alexandria office directly at 318.541.8188 to schedule your free consultation.


Richard J. Arsenault
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Recognized by several legal associations, Richard Arsenault has vast experience in complex litigation cases.

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