Structured Settlements Definition

If a person receives a single large sum they have to pay a certain percentage in taxes for the money to be lawful. Structured settlements are now often used in product liability and pharmaceutical injury cases such as litigation involving birth defects from thalidomide.

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Benefits of structured settlements for minors.

Structured settlement annuities for minors. As the years go by this allows for compounding interest to increase the account value. Structured settlements relieve the burden expense and risk of money management avoiding what can be agonizing investment decisions unpredictable investment results and ongoing management fees that have the potential to eat away at earnings on your childs or minor wards settlement. Because they were minors and not legally able to accept payments on their own the money was given to their guardian or parent. Structured settlements reduce the risk that anyone will embezzle misuse or withhold large sums of money belonging to the injured claimant. If the amount of money is small enough the wronged party may have the option to receive a lump sum settlement. Structured settlements were first utilized in canada as part of the settlement of claims made on behalf of children affected by thalidomide. The key difference between an adult owning a structured settlement and a minor owning one is control. Instead of being awarded in a single payment structured annuity settlement payments are spread out over a much longer period. Structured settlements for minors are usually paid through an annuity from a life insurance company just as for adults. For larger sums however a structured settlement annuity may be arranged. Structured settlements provide a long term stream of tax free income for a period of time or for life. The second relates to taxes. Under the laws of virtually all states now you may not take the funds from a large settlement usually over 5000 on behalf of your minor child and invest it yourself. Structured settlements for minors parents can file a personal injury lawsuit on behalf of children that were injured or otherwise negatively affected by an incident and the courts may award children financial compensation in the form of a structured settlement annuity. Payment arrangement and options are nearly unlimited when utilizing a structured settlement.

Structured settlement annuity for minors structured settlements have become more popular as the preferred option because they help the preservation of the financial security of the minor. How structured settlements work in the case of minors before structured settlements minors involved in personal injury accident and other case types with cash awards were generally granted lump sum payments. In this case the at fault party puts the money toward an annuity which is a financial product that guarantees regular payments over time from an insurance company. Structured settlements can provide payments timed to.