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understanding structured settlements

Understanding Structured Settlements And Their Advantages
By Josh Murray, Thu Dec 8th

Put in simple terms, a structured settlement is merely anagreement that’s reached between a plaintiff and defendant thatoutlines the flow of payment that the plaintiff receives, due toinjury. These payments – which are made over a specified periodof time – do offer some advantages to the recipient and areadvocated by many legal professionals, since they provide morebenefits over time, when tax rates are factored in forconsideration.

When the payment system is set up, it can be customizedaccording to the needs of the recipient and is issued through astable financial institution. In cases where there will beongoing medical expenses and/or living expenses that will becovered by such a settlement, it’s important to be comfortablewith the experience and the history of success that the companyoffers.

Among the many advantages of a structured settlement is the factthat the income that’s generated from this type of agreement isnot included as part of the recipient’s annual gross income. Inthis way, the amount of dollars that are extracted upon filing atax return doesn’t have to be adjusted upward due to the excessincome that is provided through a structured settlement.

Since the payments that are made through a structured settlementare guaranteed by some of the largest and most highly acclaimedinsurance companies in America, there is a very low risk factorthat’s involved in receiving an uninterrupted cash flow once asettlement has been reached. This, too, is a benefit, since thediscontinuation of payout can be devastating

to an individual ortheir family.

In contrast to the interest that’s acquired through CDs orMunicipal Bonds, monies that are accrued through a structuredsettlement are not factored into the calculation of SocialSecurity benefits. That translates into a greater monthlybenefit for those who are collecting payments through the SocialSecurity Department, which can make a huge different to thosewho are on such a fixed income.

Depending upon the level of disability, structure settlementscan be set up to last for the lifetime of the recipient. Thesepayments are guaranteed and can be customized to be made onspecific dates or increased on a yearly basis in order to offsetthe cost of living, as well as factoring in any other specialneeds that may become apparent.

For those who suffer from credit problems or lose assets as theresult of a divorce, the monies that are siphoned through astructured settlement cannot be considered as part of thefinancial scenario of the individual. Creditors are not allowedto claim any portion of the funds, and a structured settlementis not considered common property.

In addition to these, there are a number of other benefits thatare intrinsic to a structured settlement, only some of which aregeared toward the plaintiff. Benefits are also enjoyed by theattorneys and financial institutions that back such settlements.For further information, speak with your personal legalrepresentative or consult one of the major online searchengines.

About the author:Josh Murray is a contributing writer tohttp://www.structuredsettlementinfo.info, a site that providesnews and information on structured settlements.

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understanding structured settlements