Structured settlements are structured cash payments through an annuity system that is established to compensate injury victims for their losses.Structured settlements are the other alternative payment system to a lump sum cash settlement and are set up to provide payments to you over time. Structured settlements received special legislative treatment by the U.S. Congress in 1982, as a way to make large settlements more agreeable to the payor, who does not need to come up with a large lump sum, yet still provide certain protection to victims.

Structured settlements are designed for many other types of cases though including:

Structured settlements provide a cash flow that is completely tax liability free. bullet There is added security in receiving smaller amounts of cash over time. Many seniors are the target of greedy people and a large pot of available cash can make them an even more attractive target to conmen, and subject them to permanent loss of assets if they are grossly mismanaged by a trustee.

Recipient doesn’t have to worry about investment strategies or not adequately planning for the future. Those who do not receive structured settlements must concern themselves with making sure that they do not overspend from an account that looks like it should last forever, and subject the entire award to financial risk.

Structured Settlements are often arrived at without the risk and time loss of going to court. For many reasons, defendants who believe they could have liability will make an offer of a structured settlement to minimize their costs. Few people relish the idea of going to court including defendants because while there is the potential for coming out ahead, there is also the potential for coming out much farther behind than a negotiated structured settlement would give them. In most cases, settling a case with structured settlements can minimize the risk to both sides. In most cases where the structured settlement is made out of court, attorney fees will be much cheaper than if litigation is required. If your attorney does not need to go to court, you can see their fees be reduced by as much as 8% of the total settlement. On a one million dollar settlement, that means about $80,000 more for you.

When a structured settlement agreement is reached on the benefits to be included, the defendant will agree to fund a stream of cash to the victim. The structured settlement payment obligation is then legally assigned to an independent third party that has experience in this area, usually a life insurance company. In theory, the victim is protected from further legal complications or financial hardship of the defendant. The structured settlement is generally set up as some sort of an annuity that makes payments according to the prescribed and agreed upon schedule.

Generally, the answer is no. The laws regarding structural settlement are designed to protect you from abuse, and the ability to use the structured settlement as collateral would void that intended purpose. The payments however, can be claimed as a form of income so that if you want to buy a house, the payments represent the same financial ability that a take home paycheck of the same amount would provide.

No. You are given special tax treatment with regard to structured settlements' proceeds, and you cannot then take that in a lump sum fashion and invest it again.

No. The interest is a part of your structured settlement agreement and is therefore, tax-free. You do not then get interest on top of that. This however, is not to say that if you get your regular structured settlement payment and don’t spend all of it, that you cannot invest that remainder into another account and draw interest from that. That interest however, would be taxable.

The Attorney is in a sense loaning or advancing the Client money just by working on a contingency basis, which is, if the Suit fails, the Attorney is out the value of his time and effort. However with the exception to Louisiana Law, it is both illegal and unethical in all other states for an Attorney to Advance funds to a client. It would generally be a violation of the State Bar Rules of Professional Conduct.

As with most things in life, no one can say with certainty how a case will settle or for how much. This is the risk we assume. However, we have the use of an innovative and proprietary system that has been used for evaluating hundreds of cases, assessing case details, risks and managing the underwriting procedures.

Annuities or Structured Settlements are previously agreed upon financial instruments or Policies usually purchased by the losing side in a law suit, so they are existing and are to be paid over a period of several years. Many times the payment schedule may consist of both monthly and or annual payments for example; a $1,000,000 Annuity or Structured Settlement could be paid out at the rate of $1,000 per month with lump sum payments every 5 years, paid over a period of thirty years. Pre-Settlement Funding differs from Annuities and Structured Settlement Funding in that the settlement has not yet been agreed upon or in the case of litigation has not been settled or gone to trial. It is for this reason that Pre-Settlement Funding is so much more speculative since not award has been made.