Structured Settlement Consultants
When it comes to large lump-sum recoveries, trial lawyers often turn to settlement planners for strategies to protect their clients from the new challenges that suddenly arise. This is where the expertise of our structured settlement consultants come in.
How Do Structured Settlements Work?
A structured settlement is a financial tool that allows a plaintiff (the injured party) the ability to defer a portion, or all, of a settlement he or she is receiving from the resolution of a lawsuit. He or she can then choose to receive their settlement money when desired – according to a predetermined schedule – as opposed to all at once. For example, one may take part of the settlement as cash to cover immediate expenses. But the remainder of the settlement recovery could then be used to purchase an annuity through a highly-rated life insurance company, which then provides a plaintiff with a series of guaranteed, tax-free payments to meet his or her future needs.
This process was first made possible in 1982 when a bipartisan coalition of legislators in Congress came together to pass laws that amended the federal tax code. The Periodic Payment Settlement Act of 1982 (Public Law 97-473) was a means of formally recognizing and encouraging the use of structured settlements in physical injury and wrongful death cases.
If you’re settling a personal injury or wrongful death lawsuit, you can elect to receive part or all of the settlement as a structured settlement, should you desire one. The decision to structure must be made before accepting the settlement proceeds, in order to ensure tax-free benefits. One cannot accept the proceeds in cash now, and then later elect to create a structured settlement. Speaking with a structured settlement advisor can help you determine your available options.
What Are the Benefits?
Structured settlement planning is exceedingly useful because structured settlement payments are tax-free, guaranteed income. Although lump-sum cash settlements are also initially tax-free, the interest earned on investing that money is fully taxable. Also, unlike structured settlements, the return on any investment you make with a cash settlement is speculative and will vary over time. Structured settlement planning eliminates the burden of dealing with a lump sum settlement.
Furthermore, although most people believe they will be able to manage a large sum of cash, studies prove that most people spend 95% of their money within the first five years after settlement. Cash settlements are often depleted when recipients lend or give money to family and friends, make risky or volatile investments, or purchase expensive items
A structured settlement consultant ensures that the proposed structured settlement will meet you and your family’s immediate and future needs. Many people depend on their settlement for daily living expenses. You may design your structured settlement to include a monthly check with sufficient funds for food, clothing, transportation, and housing. Additionally, your structured settlement can be used to fund your children’s educational needs or provide income for you when you retire. The fixed nature of structured settlements provides assurance, peace of mind, and a lifetime of financial security. If you’re a personal injury lawyer who wishes to help guarantee the future of your client, Milestone’s structured settlement consulting service can help. We’ll ensure you both arrive at a plan that provides the long-term security needed.