Structured Settlements Authority

How to Get Cash for a Structured Settlement

Is a Cash Lump Sum Better?

Is a cash payout safer than structured settlement? This is a valid question that is being asked repeatedly by many individuals who have become a party to a personal injury lawsuit. Many of us have heard the sad stories of people selling their structured settlement payments for just pennies on the dollar. On the other hand, hundreds of people have squandered away their cash settlements as a result of bad judgment and unsound financial management. So what should a person do? Evidence suggests that in many instances where a cash settlement was received in personal injury and product liability cases, it was subsequently wasted away with in the first few years!

Structured settlement agreements provide an alternative for beneficiary to receive a series of periodic cash payments that are tax free. But are these structured annuity payments really safer? One of the most secure arrangements found anywhere is a structured settlement payment agreement. This obligates settlement payments to be paid as an annuity, usually by a highly rate life insurance company. Not all structured agreements are the same and thus you and your attorney need to understand the complexity of transaction when your payment annuity is being negotiated.

The process for executing a settlement structure usually involves the payment of an initial amount of money when the documents are signed to recover legal fees and medical expenses. The payment obligation usually continues over a period of years providing a steady stream of annuity payments. These settlement payments can be in equal installments or uneven lump sums or a combination of both. The structured settlement protection acts provides and additional advantage. If the payments are designated for damages caused due to a personal injury, excluding any amount for punitive damages, they are exempt from federal income tax. This is also true for a cash lump sum settlement.

Legal Aspects of Getting Cash for a Structured Settlement