When you get through your case, you have another step to consider. How will you accept your settlement?
Settlement planning is something that can be easy to forget about. But it is important to know a lump sum payment is not your only option.
Many people cannot answer the question, what is a structured settlement? Or list the advantages of this settlement type. But there are many!
Structured settlements are beneficial for certain lawsuits, such as personal injury cases. So it is important to learn more! Read on to learn the key advantages of structured settlements.
- Future Income
The problem with a lump sum payment is that it can be easy to spend the money all at once. Especially if you have had to fight your case for some time or it is a large sum of money.
A structured settlement guarantees a future supplemental income each month. You have time to plan investments and not rush. And will have peace of mind that you have some financial security.
- Market Safety
When settlement planning, consider the risk of market fluctuations. A structured settlement is easy to plan as it is not impacted by market unpredictability.
Instead, you have some financial security without worry about huge losses. And you do not need to follow the market as closely.
- Customize Your Structured Settlement
Even though you do not have full access to all the money immediately, you are still in control. Structured settlements let you decide when you want your payment, how much you want, and how often.
You can plan how you can protect and meet your interests in a sustainable way. So while you do not get everything at once, financial planning is still in your hands.
- Protected Money
You do not have to worry about external sources accessing your settlement money. For example, creditors are unable to access this money.
If you experience a divorce, the money is also protected from ex-spouses. It can be a relief to know you have some protected money regardless of what you are going through.
If the plaintiff passes away before the full amount has been received, then payments will go to the heir. The original settlement documents agreed by the plaintiff will be followed.
- Minimal Tax and Interest
Minimal tax is the well-known advantage of structured settlements. If a lump-sum payment is invested, then interest and dividends are subject to tax. And with large amounts, costs can add up!
Structured settlements avoid tax because your funds will be gradually received. There are some exceptions to this.
Some settlements gain interest too. So structured settlements can become worth more than a tax-deductable lump sum payment.
Start Settlement Planning
Now you know the advantages of structured settlements, you can start settlement planning! Consider what works best for you and your case. You can also get advice from a professional.
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