If you prevail in a personal injury lawsuit, you may receive compensation in one of two ways. The entire amount may come to you in one lump sum payment, or it may be divided into a series of payments, an arrangement known as a structured settlement.
Many people with injuries that require long-term care choose structured settlements, but there are merits and drawbacks to both payment options. Here’s what you need to know to figure out which type of personal injury settlement you prefer.
How Structured Settlements Work
With a structured injury settlement, you’ll receive periodic payments rather than one lump sum.
Your personal injury attorney can negotiate the terms to meet your needs. You might, for example, want the first payment to be substantial enough to cover all of your bills and expenses. Or, if you have growing children, you may prefer to have the payment amount increase over time. Your settlement may also be structured to provide you with lifelong income. With your attorney’s help, you can receive your funds exactly as you’d like.
Reasons to Consider a Structured Settlement
Structured injury settlements have several advantages. The benefits to this payment arrangement include:
- An assurance of having income in the future
- Ongoing source of funds to support long-term needs
- The likelihood of paying quite a bit less in taxes
- No risk of spending the settlement money too quickly
- Less pressure to loan or give cash to family and friends
Arguments Against Structured Settlements
Structured injury settlements aren’t right for everyone who wins a personal injury lawsuit. Some people prefer receiving a lump sum payment because:
- Fluctuations in the economy could result in settlement payments that are insufficient to meet financial needs
- Once set, the terms of a structured settlement can’t typically be changed or accelerated
- Receiving structured payments can result in a loss of public benefits, which can be problematic for those who don’t have private health insurance
Is a Structured Settlement Your Best Option?
The ideal payment arrangement for you depends upon your personal circumstances.
If the amount of your injury settlement is on the smaller side, you may want to take a lump sum payment. Putting in the time and effort required to set up a structured injury settlement is generally only worthwhile when larger amounts are involved.
However, your needs and preferences matter. You need to receive compensation in a way that works for you, and an experienced personal injury attorney – like the award-winning team at William Rawlings & Associates — can help make sure that happens.
Our highly skilled lawyers have more than 35 years of experience working on personal injury lawsuits, and we’ve collected millions for clients in Utah, California and Idaho. We’ll fight to ensure you receive fair compensation for your losses, and we’ll negotiate a payment solution that protects your interests.
For more details on structured settlements, or to schedule a free personal injury lawsuit consultation, contact William Rawlings & Associates today.