Examples of cases that can result in structured settlements include personal injury, workers' compensation, medical malpractice, and wrongful death. During most lawsuits, the parties involved have a lot of discussions about what would be needed to resolve the case. Personal injury claims are generally designed to compensate injured victims for expenses, costs, and suffering related to their injuries caused by the defendants' negligence. In cases with less serious injuries, the parties can often agree on a reasonable dollar amount to resolve the case.
For cases involving more serious and lasting injuries, negotiations to reach a settlement can be much more difficult. Structured agreements can help resolve the problems that can arise in these types of more complex personal injury cases. Personal injury cases are among the most common types of civil lawsuits that lead to structured settlements. For nearly 25 years, the federal government has recognized and encouraged the use of structured settlements in personal injury cases.
Structured settlements have also attracted strong support from plaintiff attorneys, state attorneys general, legislators, judges and disability advocates. We've already given you an overview of how structured settlements come about and why they may be preferable. If you are currently going through a civil case and are waiting to receive an offer from the defendant or have a judge award you a sum of money, you should consider both the benefits and potential drawbacks of structured settlements. Resolving a lawsuit through a structured settlement ensures that the plaintiff will have a steady stream of future non-taxable income to pay medical bills, living expenses, and other needs.
The judicial process framework prevents you from selling your structured settlement or accepting a lump sum paid without court approval. Once you agree to negotiate a structured agreement, you'll work to analyze the specific terms of the agreement. Although it may seem like an intimidating term, structured settlements are really easy to understand. Structured settlements can also be designed to increase payments over the years, starting relatively low and ending up.
If the parties decide to use a structured agreement as part or all of the plaintiff's compensation, they must agree on what amounts will be paid, how often and for how many years. Structured settlement payments are secured and irrevocable; however, annuity settlement options may differ from typical revenue contracts. After the settlement money is negotiated and final terms are reached, the court order will request that the funds be placed in a type of income annuity contract called structured annuities. Settlement payments are usually a lump sum (all at once) or structured (regular payments over a period of time).
We mentioned it here because one of the most important questions people often ask about structured settlements is whether they can change the terms of their agreement at a later date. If you agree to take your compensation as a structured settlement, rather than receiving a large amount from the plaintiff, you will receive periodic payments over a fixed number of years. Your structured agreement can cover any period of time, subject to the agreement you negotiate with the defendant and what the qualifying assignee and life insurance company may offer.