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Your email address will not be published.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
  • lawyers
    5.0/5.0

    I will be forever grateful to Robert and his team at Feinberg & Alban, P.C. He is the best of the best and I truly cannot recommend his expertise enough. Having Robert represent me brought me great comfort. I never once doubted that he would not be s...

    Read more

    Client

  • google
    5.0/5.0

    Robert and his team were unbelievably caring and thorough in working on my interests. It was a very serious case. It needed much attention and skill. Robert and his team were always there for me from the time I was in the hospital. They got me an ama...

    Read more

    Jason Lebovitz

  • google
    5.0/5.0

    I suffered injuries and total loss if my car last year in a head on collision. Colleen Santora took my case and fought well on my behalf. She thoroughly answered all my questions and concerns, always responding in a quick and timely manner. She helpe...

    Read more

    Jessica Matt

  • google
    5.0/5.0

    Choosing Feinberg & Alban was probably one of the best decisions I ever took. Robert Feinberg and Perry Feinberg are amazing in their professionalism as well as in compassion. Perry was the lead attorney for me. He was always responsive to any questi...

    Read more

    Raja Bhattacharyya

  • google
    5.0/5.0

    I would like to express my gratitude to Feinberg & Alban PC. They are great people and professionals. If you need an attorney these are your guys. Thank you so much! Tatiana

    Read more

    Tatiana Andreeva

See all reviews
Awards & Affiliations
Contact us

Quick Contact Form