The main advantage of a structured settlement, in addition to the limitations on waste, is the tax-free status of the profits involved. All settlements are tax-exempt, but if you invest that money and earn interest, that accrued interest is taxable. Interest earned on the annuity of a properly structured settlement is not taxable; they are all considered part of the settlement.
a structured settlement annuity
is a tool that helps the claimant ensure that the funds in a settlement will be available in the future.If you have a structured settlement, you may need a larger amount of immediate cash than your settlement pays. The difference between lump sums and structured settlements is that a structured settlement payment takes place over an extended period of time. If you choose to receive your prize in a structured settlement, you will receive periodic payments for a certain number of years. Learn more about how to protect funds from a structured settlement and your options for establishing a special needs trust by involving legacy improvement.
If you choose to receive payment for your lawsuit through a structured settlement, you can determine if you start receiving the funds immediately or at a later date. If you find that your expenses increase while you wait for your first structured settlement payment or initial lump sum, you may want to consider pre-settlement financing options to help you. If you are interested in selling your annuity or structured settlement payments, a representative will provide you with a free, no-obligation quote. If you are ready to receive a structured settlement or have any questions about this topic in relation to a personal injury or other civil case, Legacy Enhancement can offer you the guidance you need.
In addition, unless structured payments go to qualified funding vehicles, such as custody accounts or trusts, the recipient of annuity payments may permanently lose the ability to access public funds such as Medicaid and Medicare. Contact an experienced personal injury lawyer to analyze the facts of your case and help you decide if a structured agreement would be best for you. There are many reasons to consider using structured settlement annuities to resolve your personal injury or taxable damage case. The total amount of structured settlement is generally much larger than what the injured party would receive with a direct cash settlement.
Once the terms of a structured annuity payment are established, it can be very difficult to change the terms of payment. A qualified transferee will be appointed to structure such payments and purchase an annuity from an insurance company. Using structured settlement to fund a special needs trust can also reduce administration costs, since only trust assets will be subject to charges.
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