subject: Winning A Structured Settlement [print this page] In most cases, a settlement is awarded in personal injury cases, or often times in a lawsuit against a large corporation that has been found negligent in some way. When you are awarded a structured settlement from the at-fault party, it is a virtual admission of guilt from them (while its not a legally binding ruling, the court would have most likely found them guilty if the trail/claim continued, thus an effort to settle outside of court was made). In most cases, corporations wish to avoid the negative publicity of a criminal negligence ruling, or any other number of bad legal consequences associated with a losing verdict. Depending on the risk to the corporations reputation, your settlement offer will reflect that amount of concern in the amount. Play hardball with the defendant if you are in the right! Main benefit of the structured settlement is the tax avoidance. In case, set up rightly, the plaintiffs will have less of the tax burden. In a few cases, the structured settlements might even be tax free. By assuring the income over period of time, the structured settlements will protect plaintiffs from themselves. And lots of people dont know how you can manage the finances or cant say no to the family and friends. The structured settlements essentially give "allowance" that will make that difficult for plaintiffs to get splurge.
Many, feel that the structured settlements might limit their choices. For instance, plaintiffs at times have little difficulty buying the home, and other big ticket items, in case they are not at all allowed to borrow against the future payments. Additionally, you might do good financially with the lump sum payment. Some other kinds of the investments might give you the better rates of the long term return. Additionally, one must be wary of the excessive commissions for the annuities.
While considering the structured settlement, the plaintiffs have to be very careful of potential self dealing. There are cases where the lawyers pocket large commission on the annuity, which they set-up for the clients. Lawyers have been known to suggest the financial planner to set-up the annuity when collecting the referral fee at same time. Plaintiffs also have to consider the life expectancy. Unluckily, the victims of malpractice and personal injury will have the shortened life expectancy. As many annuities cease payment on death, it might make sense to insist minimum number of the payments are all made or that remaining payments are paid in plaintiff's estate.
