What Should You Know About Structured Settlements?
Structured settlements are a form of case settlement. They are commonly used in personal injury cases to provide injured parties with a long-term, stable source of income following a damage award. A structured settlement can help limit tax liability and make it easier to manage expenses as the years go by.
The Basics of Structured Settlements
Many structured settlements are set up to provide a large initial payment. This provides immediate funds to cover medical expenses, recoup compensation to recover from long-term unemployment caused by the injury, or pay down other debts that the individual owes.
Following the initial payment, case settlement plans can be structured to provide long-term, reliable income that takes into account anticipated future expenses. For example, payment plans can increase when surgery or college expenses are anticipated. They can also gradually decrease over time taking into account the individual's recovery and ability to return to work. If funds are not needed immediately, it is also possible to delay receipt of funds until after the individual reaches retirement.
Structured Settlements in Texas
In Texas, the Structured Settlement Protection Act helps protect individuals who have a structured settlement. These protections require judicial approval before a payee can sell the future payment rights. They also allow full redaction of the payee's name and personal information to protect their privacy and prevent predatory offers to purchase rights to future payments.
The Advantages of an Annuity & Sound Financial Advice
The longer the term of the structured settlement, the greater the potential for the responsible company to go out of business. For this reason, it's best to require the defendant company to place the funds into an annuity account with a reliable insurance company. When this happens, the insurance provider is responsible for managing the funds and guaranteeing that the funds will be paid in full.
Whether it's a few hundred thousand or a few million, it's always advisable to seek reliable financial advice on how to use and invest your damage award. Our attorneys can help you anticipate future expenses related to your accident while your financial advisor can help you understand how to apply your award to cover these expenses and meet your long-term financial goals.
The Welmaker Law Firm can help you understand your rights regarding a structured settlement and other case settlement options. We invite you to contact us at (726) 666-6666 to speak with our legal team.