Structured Settlements: What They Are
In our experience, Structured settlements are an increasingly favored method for plaintiffs in personal injury cases to receive compensation. Often referred to as “structures,” they involve receiving settlement proceeds over a period of time in installments, rather than in a single lump sum. All proceeds from a structure are completely tax-free because Internal Revenue Code Section 104(a)(2) provides that money received through periodic payments is compensation for a physical injury.
Structures are created by funding a life insurance company annuity that offers an unlimited number of payment stream options. Payments can be equal, or amounts can vary over time. They can begin immediately or be deferred until you require them, and they continue as long as you choose. You select the design that suits your needs, and payments are guaranteed not to change no matter what happens with interest rates or the stock market.
At NFP Structured Settlements, we help develop customized income streams based on a highly detailed analysis of your specific circumstances. The structure usually provides "up-front" money for immediate concerns such as medical expenses, special equipment, other out-of-pocket expenses and attorney fees. All future costs are also considered, including long-term care, lost wages, education, spousal support, retirement, mortgage payments and any other potential needs.