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How Cash for Settlement is Taxed
By Joshua Shapiro
Generally, income as a result of personal injury is not taxable, depending on the specific type of award. However, some areas are taxed as income. For this reason, and the fact that Read more...
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reporting income from structured settlements
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Structured Settlement Or A One-time Lump Sum Payment?
By Greg Smith, Thu Dec 8th
If you are involved with a legal decision, financial claim orinsurance arrangement, the financing process to settle andresolve the claim can often take two forms. Either a one-timelump sum payment, or a long-term periodic series of deferredstructured settlement payments. But which is best for yoursituation? Learn more at http://www.settlements-i.com/ A structured settlement involves a financial or insurancearrangement which includes a periodic stream of payments, that aclaimant or plaintiff accepts in order to resolve a personalinjury claim or other legal case. They were first utilized inCanada and the United States during the 1970s as an alternativeto lump sum payments and are now part of the statutory tort lawof several common law countries. A structured settlement is a deferred payment method forcompensating injury victims, and is a voluntary agreementbetween the injury victim ( plaintiff ) and the defendant. Theplaintiff will receive the monetary payout over the course of anumber of years through this deferred payment agreement. Under astructured settlement, an injury victim does not receivecompensation for their injuries in one lump sum, but rather,they will receive a stream of tax free payments designed to meetfuture expenses and living needs. This type of compensationmethod is becoming more popular in a wide variety of legalcases.
The benefits of a structured settlement over a lump-sum paymentinclude the security of a guaranteed long-term income withdeferred payments that are exempt from income taxes. The federalgovernment encourages the use of structured settlements inpersonal injury cases. Structured settlements also attractsupport from plaintiff attorneys, state attorneys general,legislators, consumer and disability advocates. Structured settlements can be ideally suited for cases with: •Persons with temporary or permanent disabilities • Guardianshipcases that may involve minors • Workers compensation cases •Wrongful death cases • Severe injury Want to Sell Your Structured Settlement? Not everyone benefitsfrom a long-term payment situation and some may want or need alump sum instead. The owner of a structured settlement, such aslottery winners, medical, insurance, accident and lawsuitsettlement owners, can often sell their rights to the deferredpayment stream, in exchange for a one time lump sum payment froma variety of financial institutions. All situations aredifferent, and as with any legal issue, you should alwaysconsult your attorney. About the author:Greg Smith is the publisher of the informational web site on Structured Settlementsat http://www.settlements-i.com/. Visit his web site for thelatest on settlements of all types.
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Additional
Resources
Structured Settlement Annuity
By Michael DeGeorge
In earlier articles, we've seen the benefits of structured settlement annuities over lump sum payments. For some, this protects them from the temptation of spending the bulk of Read more...
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Additional
Resources
How Cash for Settlement is Taxed
By Joshua Shapiro
Generally, income as a result of personal injury is not taxable, depending on the specific type of award. However, some areas are taxed as income. For this reason, and the fact that Read more...
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