In many cases, both parties in a civil lawsuit may decide to settle the case out of court and will negotiate a fair amount of compensation for the plaintiff to receive.
In fact, most civil lawsuits end in settlements, especially in personal injury and wrongful death cases. But, a common legal question that frequently comes up is how a settlement is distributed to the receiver?
Will the plaintiff receive a settlement in a lump sum, or will they receive a string of payments over a period of time? Lump sum payments are often used in negotiations, mainly because these payments are quick and will essentially end your legal matter. However, lump sum payments have their fair share of glaring disadvantages.
On the other hand, structured settlements offer a long-term alternative to lump sum payments. In short, a structured settlement is a type of annuity that guarantees payment to the winner of a civil lawsuit by distributing payments out over an extended period of time.
There are a variety of benefits to receiving structured settlements in a civil lawsuit. Your personal injury lawyer in Coeur D’Alene will explain more, but here are the main reasons why a structured settlement may be your best route in a personal injury claim:
Structured Settlements Offer Financial Security
A structured settlement is generally a payout that is guaranteed from a legal settlement through periodic installments, whereas a traditional lump sum payment is a one-time payout in the aftermath of a lawsuit.
The most apparent benefit of a structured settlement is the assurance of financial security. Structured settlements offer periodic payments, giving you flexibility in your spending habits. After paying medical bills and other important expenses, a lump sum payment could be drained completely, regardless of the amount.
Another beneficial aspect is that structured settlements are almost always tax-free, even after you receive the payments. On the other hand, after you receive a lump sum payment, you are responsible for paying taxes and other dividends.
Are Structured Settlements Common?
In any civil lawsuit case, the plaintiff can opt to receive a structured settlement. However, there are a number of specific cases that structured settlements are both common and recommended. These cases include:
● Personal Injury: In these cases, structured settlements can aid the recipient and make paying medical bills and other expenses convenient.
● Workers’ Compensation: If an individual is unable to continue their employment due to an injury or sickness, a structured settlement is encouraged so the individual can handle living and medical expenses.
● Medical Malpractice: In the event of medical malpractice, an individual may be unable to continue their life under normal circumstances. Consistent payments will assist the victim of medical malpractice while he or she recovers. If the victim is deceased, regular payments will be received by the family to take of funeral proceedings and other matters.
● Wrongful Death: This case is the extreme result of medical malpractice, personal injury, or a combination of other unfortunate events. A tax-free string of payments won’t consolidate the loved ones of a victim, but it will replace the wages of a deceased loved one
In short, a structured settlement is a flexible payout option that can provide for the family after a civil lawsuit. Knowing the basics and benefits of this option will enable you to decide on what’s best for you and your loved ones in the aftermath of a personal injury lawsuit.