Most slip and fall cases are settled with the insurance company for the negligent business or property owner paying the victim the settlement amount in a lump sum. Depending on your circumstances, you may prefer to receive your payments in a structured settlement where you receive your compensation over a period of time, sometimes with a larger initial payment. But is a structured settlement right for you?
Pros of a Structured Settlement
Like with many decisions you must make in your case, there are pros and cons to accepting your compensation in a structured settlement. These payment arrangements are sometimes used when the victim is a minor or has suffered catastrophic injuries that have permanently disabled him and will require long-term medical care or other supportive services. The benefits of a structured settlement include:
- Won’t spend the money too fast. Sadly, many accident victims who receive a lump sum payment do not budget their settlement wisely or simply cannot handle large sums of money. The result is they do not have the money they need down the road—which the settlement was designed to provide for. A structured settlement avoids this risk.
- Tax consequences. While much of the settlement amount is generally not taxable income, you could owe taxes on the interest and dividends if you invest your settlement proceeds or save them.
- Can replace lost income. If you are permanently disabled or must make a career change due to your injuries, a structured settlement can replace your lost income for a period of time or for your lifetime.
- Can fund future needs. If you anticipate higher expenses in the future, such as college expenses for your children or expensive medical treatments, you can structure the settlement so that you receive the money for these expenses at the time you incur them.
When a Structured Settlement May Not Be Right for You
Structured settlements are not always the best option when settling a slip and fall case. Reasons why you may not want to receive your settlement proceeds over time include:
- Your current needs. You may have gotten behind in your monthly bills while you were off work recovering from your injuries or have a big expense you need to pay now. Receiving your payment in a lump sum settlement could help you pay these expenses and get on with your life.
- Investment options. When payments are made through a structured settlement, the insurance company often purchases an annuity insurance policy which pays the victim a monthly payment over a certain amount of time or his life. These policies may not be a good investment that will grow over time. You may prefer to receive a lump sum payment and invest the portion yourself that you do not need right away.
- Payments are too small. You may have underestimated the monthly expenses you will need to pay out of the structured settlement payments in the future or economic factors you cannot predict could change your future needs. With a structured settlement, you cannot go back and renegotiate your payments if you later find that you need more money.
If you are considering a structured settlement in your slip and fall case, you need an experienced attorney who can explain the options to you and help you decide if this is right for you. Call our firm at 866-299-0558 to schedule a free, no-obligation consultation.