After you have won a personal injury lawsuit, you could have the option of taking your award money in a lump sum or receiving a structured settlement. With a structured settlement, your personal injury lawyers Tucson firm is going to take their fees and expenses they incurred during the trial. You can then get monthly payouts of the rest of the money. Here are some advantages and disadvantages to a structured settlement so you can make an informed decision.
Benefit #1: Disciplined Spending
The majority of people who take a lump sum with their settlement have usually blown through the money within five years. This leaves them with little to no money for supporting themselves and they often become depending on the government for their financial support. But if you choose a structured settlement, your award money will be paid out to you on a schedule so you won’t be able to spend it all in a short time. If you aren’t disciplined with money, this may be the ideal option for you.
Benefit #2: Funds to Cover Advancements
You can dedicate some of your monetary award to cover any advancements in medicines or treatments for your disability in the future. In five years, there could be a treatment that will make you feel great so you can go back to work. With a structured settlement, you can make sure you have money set aside in case something like that happens.
Benefit #3: Protection from Bankruptcy
When you choose a structured settlement, your money is typically put into an annuity. In most states, your annuity is protected by the state in case the insurer goes bankrupt. As a result, you don’t have to be concerned about your money not being there due to a bad investment on the part of the insurer or some other financial catastrophe. If you have any questions about your money being protected, your personal injury lawyers Tucson professional can help you understand this idea more clearly.Disadvantage #1: Potential Changes in Payment Amounts
The unknown is one of the biggest disadvantages in structured settlements. Changes in the economy could make your payments drop below the expected minimum which could leave you with little money for your everyday needs and expenses.
Disadvantage #2: Potential IRS Action
If you choose a structured settlement and retain too much control over it, the IRS may come for extra taxes. With many structured settlements, you have a tax benefit, but there is always the chance that the benefit could be revoked if regulations change in the future.
If you have been injured through the actions or negligence of another party, consider scheduling a free consultation with personal injury lawyers at Price & Price Law to discuss your case. They have expertise in handling personal injury cases.
