If you’ve been awarded compensation, you have a big choice to make. Will you take your award in a structured settlement or a traditional settlement? There are pros and cons to both options.
If you’ve proven your personal injury case to be no-fault, you may be entitled to a large compensation. This award provides relief for lost wages, medical bills, and pain and suffering. Now, you’re faced with making a one really weighty decision. Will you choose a traditional settlement, otherwise known as an annuity, or will you opt for a structured settlement? Make sure this is not a rash decision, but a well-thought-out choice for the betterment of your future.
STRUCTURED SETTLEMENT OR TRADITIONAL SETTLEMENT
There are pros and cons to both these forms of compensation. That’s why it might prove difficult to make the decision on how to receive your award. The traditional settlement or annuity is known as the “lump sum” payment. This is where the entire amount of your compensation is awarded to you at one time. Of course, attorney fees and medical bills will be subtracted from the total, but the rest will be yours to use as you will.
The structured settlement works by awarding you small payments per month until the entire amount is allotted to you. The structured settlement is known as the “flexible settlement” because it can be adjusted during the planning process to better fit your individual needs. For instance, if you need to pay a large bill upfront, you can choose a substantial portion followed by payments for the rest. You can schedule the larger portion toward the end of the payment period, or even during the middle.
DRAWBACKS AND PERKS OF THE STRUCTURED SETTLEMENT
One of the biggest problems with the structured settlement is the fact that once it’s been scheduled, you cannot change the process in which the money will be awarded. This could cause problems if you find yourself in need of the rest of your compensation. The biggest perk of the structured settlement is that it is non-taxable income. Now that turns the tables a bit.
QUESTIONS ANSWERED BY AN ATTORNEY
Although the process of awarding compensation is fairly simple to understand, you still may have questions. If so, you can contact the Fry | Goehring for more information. You can visit our website or call us today for a consultation.