When a client is so seriously injured that they may not be able to work again at the same job and will likely incur future medical costs, it may be prudent for the client to consider a structured settlement as opposed to a lump sum cash settlement if one is offered. Our attorneys have handled many serious injury cases where a structured settlement has truly been in the best interests of our client. This is particularly so in the context of cases where the client lacks financial sophistication and may need future medical assistance and may incur future lost wages.
Of course, the main hallmark of a structured settlement is a long term annuity which provides cash payment benefits usually over time, sometimes over the life of the client. Structured settlements can be set up in a variety of ways to provide for the client’s future financial needs. These annuity/structured payments can be paid monthly, annually, semi-annually and basically on any time schedule desired. The focus, of course, is to provide long term financial assistance for the client who may need it. If the client does not need long term financial assistance, then a structured settlement may not ever come into play. However, for those who are seriously injured, it is likely that they will need long term financial assistance. Because of the tax benefits of a structured settlement (the interest on the amount of the annuity purchased is not taxable to the client over the course of the annuity payments) in many cases it is advisable for the client to consider a structured settlement.
There are a lot of advertisements on television these days about how clients who have received structured settlements can “cash in” and receive their monies now. Obviously, these companies that offer to buy structured settlements do so at a steep discount thus essentially taking much of the client’s needed money away from them. Because some clients are poor money managers they often times they resort to these companies in order “to cash in” on their structured settlements and get a quick term cash infusion. This results in a huge loss to the client.
For our clients, we very carefully go over with them the pros and cons of structured settlements. They are not for everyone. However, in cases where the client will likely have problems in the job market and will likely incur future medical expenses, our experience has been particularly for those who are not financially sophisticated and/or capable of managing their own investments without assistance that theirs may be a case appropriate for this type of settlement. As long as the tax advantages of these structured settlements remain in place and as long as clients are informed about their options, we have found that many clients benefit from these types of settlements. While there will always be a cash portion of any such settlement, the structured portion can provide a much needed safety net for the seriously injured client well into the future.
Clients who have been seriously injured should always consul with experienced counsel about structured settlement annuities. They may be the very best option in the right case. Our experience has been that they can be extremely helpful for our clients, thus, our practice is to always discuss them with clients involved in serious injury cases.