As of 2018, there were over 1 million attorneys working in the United States.
That number has continued to increase. A structured settlement often involves large payments broken into smaller portions. So, what is a structured settlement, and what does it mean for you?
What Is a Structured Settlement?
Structured settlements are awards from a lawsuit paid to you over a number of years instead of all at once. In essence, they are the opposite of lump-sum payments. There are a few key advantages and some disadvantages to a structured settlement.
When trying to answer what is a structured settlement, you must first understand how does a structured settlement work. What happens with structured settlements is that you agree to split up the amount of money you will receive over time.
For instance, if you had a judgment in your favor for 1 million dollars, you may receive a structured settlement. That means that you will receive a certain amount of that $1 million every year until the total has been paid to you.
Why Do People Use Structured Settlements?
One of the big reasons why people often find themselves involved in a structured settlement is due to taxes and interest. It is also easier for most defendants to provide full compensation if spread out over time. In some cases, you can save a considerable amount by taking a structured settlement.
Should You Take a Structured Settlement?
This completely depends on your circumstances. It is often not wise to take on a small or medium judgment. If you are owed a small amount of money, most people will want it all upfront. However, if the settlement is for a lot of money, say over $100,000, it could be more beneficial for you.
In the end, you should make an informed decision based on your individual circumstances. There are some downsides when considering a structured settlement.
The Downsides of a Structured Settlement
Now that you know what a structured settlement is, you can begin to see some of the drawbacks. If you need money now, you won’t be able to access the money you are owed. This is because the structure only requires a certain amount to be paid.
If you find yourself in this situation, Rightway Funding reviews of your structured settlement could be important. Getting a lump sum of cash when you need it most can be the difference between financial ruin and a full recovery.
Structured Settlements and You
Sometimes, given the many complications of the legal system, you may be forced to accept a structured settlement. If this happens to you, know that you do have options for getting a lump sum based on what you’ve been awarded. This can be particularly useful if you have ongoing medical expenses that must be paid.
Knowing what is a structured settlement and how you can be affected by them will leave you better equipped to deal with your future. Whether part of your settlement agreement or as a means to avoid a large tax bill, structured settlements and lump sums both have their place in the modern legal system.
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