Structured vs Lump Sum Settlements
Most personal injury cases are settled by the payment of a single, lump sum. A less common type of settlement involves the purchase of an annuity and consists of multiple payments coming in future years. This is known as a structured settlement.
Structured settlements are commonly used when parents are resolving injury claims for their children. Ohio requires settlements for children to be held until the child’s 18th
birthday. The fear is that the 18-year-old takes the money from the bank and purchases a Dodge Challenger SRT Demon 170. Or, worse yet, the 18-year-old leaves the bank and heads to Hollywood Casino. A structured settlement can prevent that type of disaster.
Justin Mosely is an expert on these types of settlements. He works for CW Settlements. He lists the following benefits of structured settlements:
– 100% Income Tax Free for injury and wrongful death cases.
– Payments are guaranteed.
– Guaranteed Rate of Return – these are not affected by market conditions
– No overhead fees or expenses.
By way of example, Justin described a $50,000 settlement that, when structured, paid a total of $79,500.
Because of their flexibility and tax-free growth, structured settlements can be a good choice for adults as well as children. If you are interested in a no-obligation structured settlement quote, let us know.
