The Advantages of Structured Settlements

The advantages of Structured Settlements are numerous and include:

For the claimant:

  • Beneficiary of a custom designed needs-based plan based on specific determined needs.
  • All payments tax-free
  • Benefits fully guaranteed
  • The risk of money mismanagement and/or early dissipation of funds are eliminated
  • The worries/stress of investing a large cash lump sum are avoided
  • A larger total payout over time is achieved than that available by any other means
  • There are no fees or penalties subtracted from the settlement
  • A lifetime income that you cannot outlive, is available
  • In the event of an early death, a beneficiary for the remaining payments can be designated, assuring family financial security

For the defendant:

  • Case is resolved within acceptable cost parameters
  • The potential for an unpredictable, possibly catastrophic jury award is eliminated
  • The time and expense of a trial and possible extensive appeals are eliminated
  • A general release from any liability for future periodic payments is obtained
  • The ability to receive a tax deduction immediately for the entire settlement cost

For the Plaintiff Attorney:

  • The ability to structure the attorney fee on a tax-deferred, tax-favored basis
  • Avoidance of risked-based investments in personal financial planning
  • The advantage of structured payments at pre-determined future dates, designed to match up against future expenses.
  • Avoidance of tax liability on large cash payment at time of settlement
  • Favorable ruling in the Richard A. Child's v. Commissioner of Internal Revenue 103 T.C. No. 36 Docket no. 15639-92 (1)(2).
    U.S. Court of Appeals affirmed that attorneys may structure their fees and that the taxes are due when the structured payments are received.