Search Site
Menu
Considerations of Structured Settlements at the Close of the Injury Case

This blog concerns the issues relating to structured settlements. A structured settlement is a long-term payout. In the appropriate circumstances with certain clients, it should be given consideration. It is essentially an annuity. Because the payouts are made over time, perhaps decades, you need to make sure the funds are being paid by a sufficiently capitalized corporation, one that will be around to make those payments in the future.

Assuming that the structure is in fact being placed with a solvent company, and that it is guaranteed by another solvent company, there are two times where I would recommend a structured settlement to a client. The first is if the client is at risk of spending money in a hasty manner. Hopefully, that client will recognize the need to be protected and opt for the assurance of having money in the future. It becomes something of an allowance. This necessitates an honest discussion between client and attorney. The second advantage of a structured settlement is dependent on interest rates. This is less of an advantage in the present day than it used to be, as interest rates are quite low as compared to those of other decades. Even with lower interest rates, the payouts over time will reflect the interest accrual, however large or small they may be.

There is an additional tax advantage of a structured settlement. When you settle a personal injury case, the money paid to you is tax-free, but any growth from thereon is taxable. With a structured settlement, however, the entire income stream from the structured money is not taxable. To gain the tax benefit, there cannot be something known as “constructive receipt”, a concept to discuss with your lawyer or accountant.

The solvency of the insurance company (and the company guaranteeing it), the chance that some people may not be careful with a one-time payment of money, and the slight tax advantage (even now) of an income stream down the road are all important factors to consider when deciding whether to take a structured settlement. Though it may not have the same advantages these days, a structured settlement can at least be worth considering as part of your case’s resolution.

Leave a Reply

Your email address will not be published. Required fields are marked *

Feinberg & Alban, P.C. fervently protects your rights
  • The Boston firm of Feinberg & Alban, P.C. specializes its practice in the area of personal injury.

    The attorneys serve the entire state of Massachusetts in addition to affiliating with lawyers in other states to handle cases outside of Massachusetts.

  • $7.7 Million Award for Feinberg & Alban Client in Personal Injury Trial

    Boston Attorneys Win Highest Injury Verdict in Massachusetts in 2011 & 2012.

Client Reviews
  • google
    5.0/5.0

    I recently hired Robert Feinberg of Feinberg and Alban. He was professional, knowledgeable, compassionate, reliable and responsive. The results he brought me were truly amazing. I would highly recommend Robert Feinberg to friends and relatives. I ...

    Read more

    Joanie Bell

  • google
    5.0/5.0

    I used the law firm Feinberg and Alban pc to handle a personal injury case for me. I found them to be very honest, ,always reachable, and extremely competent. Robert Feinberg worked very hard for a long time to accomplish a fair settlement. I would ...

    Read more

    jay slobodkin

  • google
    5.0/5.0

    Robert Feinberg is a dedicated attorney who goes above and beyond to help his clients. He is prompt and thorough in his work and always perseveres to get the best results for his clients. I admire and respect his professionalism and work ethic. His k...

    Read more

    Marissa Broverman

  • google
    5.0/5.0

    Robert Feinberg and his team were nothing short of stellar. They were prompt in all communications, insulated me from complications with insurances while I recovered from my injuries, and produced a favorable outcome after all was said and done. Ver...

    Read more

    Nigel Mathes

  • google
    5.0/5.0

    Great communication and follow up. Responsive to my needs and positive result's !

    Read more

    Chris Connor

See all reviews
Awards & Affiliations
Contact us

Quick Contact Form