A Guide to Structured Settlements

  • Added:
    Nov 22, 2012
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A Guide to Structured Settlements

At times when a plaintiff settles a case for an amount that is bigger than usual, the plaintiff's attorney or maybe the financial planner who was consulted with regards to the settlement would suggest paying the settlement in installments instead of giving a huge sum in one go. When settlements are paid in this way, they are known as structured settlements.

A structured settlement is usually created when one or more annuities are purchased. This guarantees future payments. Under a structured settlement arrangement, payments can be provided in almost any schedule or way as long as all the parties involved agree to it.

Benefits of Structured Settlements

One of the biggest advantages of such an arrangement is avoidance of tax. With a good enough set-up, a structured settlement can end up reducing the tax obligations of a plaintiff by quite a lot. In some cases, the settlement can be completely tax-free. Also, a structured settlement arrangement can protect a plaintiff from going through dissipated settlement funds when he/she is required to pay future needs or has other commitments. Even minor can benefit from such an arrangement.

There are some people who are not good with money. For such people, a structured settlement is a very beneficial arrangement. They do not have to worry about taking care of their finances. A consultant will take care of their money and commitments for them.

Selling Structured Settlements

When people have structured settlements, companies that are interested in purchasing them sometimes approach them. As someone with such an arrangement, you can choose to sell your settlement for a good amount. Such sales are restricted in some states so if you have such an arrangement and have been approached by a firm for a sale, make sure that you check with your local laws to make sure that it is alright.

Structured settlements are designed to make payments easier. If you want to find out more about them, you can always read online or consult a local financial advisor.

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George is an avid traveller that loves writing on all topics for Interesting Articles.


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