How Do You Get a Structured Settlement?
Most personal injury case settlements are settled with a lump sum payment. However, you might have the option to take on a structured settlement if the defendant is willing to agree to it. Although the process might differ slightly in your state, here is an idea of how your structured settlement will work.
The first part of receiving a structured settlement is settling your case with the defendant. Whether you do it in court or reach an agreement outside of the courtroom, it is important that both parties have agreed to an amount that should be paid to you. For instance, the settlement amount could be one million dollars. If you want to get a structured settlement, the defendant would buy a special annuity with the money that is owed to you. The annuity would come from a life insurer. You would be named as the annuitant. The defendant would retain ownership of the annuity.
You would start to receive payments on a regular schedule from the annuity. You and the defendant could agree to you receiving part of the one million dollars upfront and the rest in payments. You could also arrange for a cost of living increase to be automatically given as time passes. This would help to ensure that you have steady, dependable payments until the settlement is paid off.
One of the main benefits of receiving your payments through an annuity is that it is tax free. Most courts do not have an objection to them so you should have no trouble getting it through the court. They are usually ideal for people who have trouble managing money and children under the age of 18. Your personal injury lawyer can help you determine if a structured settlement is the right option for you. If you have concerns about the settlement, your lawyer can address them.