A structured settlement is a legal agreement between two parties that resolves a dispute or lawsuit. Under this arrangement, the defendant commits to making periodic payments to the plaintiff over a designated timeframe. This approach is commonly employed in cases involving personal injury or product liability. Its advantage lies in providing the plaintiff with a consistent income flow rather than a one-time payment.
A structured settlement is a legal agreement between two parties that resolves a dispute or lawsuit. Under this arrangement, the defendant agrees to make periodic payments to the plaintiff over a specific period of time, rather than providing a one-time lump sum payment. For instance, in a personal injury case, the defendant may agree to pay the plaintiff a fixed amount each month for a designated number of years instead of a single payment. Similarly, a terminally ill individual may opt to sell their life insurance policy to a third party in exchange for a lump sum payment, which the third party will receive upon the person’s death. This type of settlement is known as a viatical settlement. These examples demonstrate how structured settlements function by distributing the funds gradually over time, offering advantages to both parties involved. It allows the defendant or third party to manage the payments more effectively, while providing the plaintiff or policyholder with a steady income stream.
A structured settlement is a financial arrangement where a person receives periodic payments over a specified period of time, usually as a result of a personal injury lawsuit or an insurance claim.
When a person agrees to a structured settlement, they receive regular payments from an insurance company or a defendant over a predetermined period. These payments are typically tax-free and can be customized to meet the individual’s financial needs.
Yes, it is possible to sell your structured settlement payments. However, the process requires court approval, and it is advisable to consult with a financial advisor or attorney before making any decisions.
Structured settlements provide a steady income stream, tax benefits, and protection against poor financial decisions. They also ensure that the recipient has a guaranteed source of income for a specified period, which can be particularly beneficial for individuals with long-term medical needs.
In most cases, structured settlement payments are tax-free. However, it is essential to consult with a tax professional to understand the specific tax implications based on your circumstances.
Once a structured settlement is established, it is challenging to change the terms. However, in certain circumstances, such as financial hardship or unforeseen medical expenses, it may be possible to request a modification. Consulting with an attorney is recommended to explore your options.
In general, structured settlements cannot be used as collateral for loans. The terms of the settlement are typically designed to prevent the recipient from accessing the entire amount at once.
Yes, it is possible to transfer your structured settlement to another person or entity. However, this process requires court approval and careful consideration of the potential consequences. Seeking legal advice is crucial before proceeding with any transfer.
If the party responsible for making your structured settlement payments goes bankrupt, there may be legal protections in place to ensure you continue receiving your payments. It is advisable to consult with an attorney to understand your rights and options in such situations.
Yes, it is possible to negotiate the terms of a structured settlement. However, it is crucial to have legal representation to ensure you receive a fair and favorable agreement.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
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