Structured Settlements Explained
Structured settlements are designed to support those who receive settlements in managing their money to benefit their long-term financial health. This type of settlement was created as a result of many settlement recipients spending their settlement funds very rapidly rather than investing them and gradually withdrawing to cover their expenses for an extended period of time.
Structured settlements became popular in the 1980s when new laws and tax regulations in the United States made all personal injury and wrongful death settlements non-taxable. As a result of this, the income that individuals receive from their structured settlements is tax-free.
If you are the recipient of a structured settlement, instead of receiving your entire settlement in one lump sum, you will receive regular payments over a period of time. This benefits the person or company paying the settlement because they can pay over time. It also benefits the recipient, providing them with financial security from those payments.
Structured settlements come from many types of lawsuits, but most commonly are the result from personal injury lawsuits. They can also be made in cases of back pay settlements, divorce, punitive damages, and liquidation damages. It is also common to receive structured settlements through malpractice and wrongful death lawsuits.
Individuals who own structured settlements do have the right to sell them for cash. This can be done through factoring companies which provide a lump sum, cash payment in return for selling the regular payments of the structured settlement. It is possible to sell most structured settlements, whether from a personal injury, medical malpractice, or other type of case.
From beginning to end the process typically takes a few weeks, largely depending on how quickly the hearing is scheduled.