Structured Settlement Payout Options: Understanding Your Choices

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Explore your options for structured settlement payouts with Conoscienti and Ledbetter. Our expert legal advice can help you manage or sell your settlement effectively.

Blake Ledbetter Atlanta AttorneyAuthor: J. Blake Ledbetter, Partner, Conoscienti & Ledbetter

Mr. Ledbetter specializes in civil litigation in metropolitan Atlanta, Georgia, and possesses vast experience in wrongful death lawsuits. Mr. Ledbetter was recognized as a SuperLawyers Rising Star in 2018 and 2019 in the area of Civil Litigation. Published on March 26, 2024.

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Structured settlement payouts are a method of compensating people who have won or settled their lawsuits. Rather than receiving a lump sum payment, a structured settlement provides a stream of tax-free periodic payments tailored to meet the plaintiff’s ongoing financial needs. 

This form of settlement offers the advantage of security, ensuring a consistent income over a period of time, and can be particularly beneficial in managing long-term expenses resulting from injury. Understanding structured settlement payouts is essential for recipients to secure their financial future, plan effectively, optimize tax benefits, prevent financial mismanagement, and comply with legal obligations.

At Conoscienti and Ledbetter, we help you with your structured settlement payment. We pride ourselves on our professional integrity and efficiency in handling complex financial arrangements. 

Understanding Structured Settlements

Structured settlements are financial arrangements particularly prevalent in personal injury cases. When we secure compensation for our clients, these settlements provide a sequence of tax-free payments rather than a single lump sum. The defendant, or more commonly, an insurance company, funds the settlement, which an assignment company may facilitate.

Some benefits of structured settlements include:

  • Tax Advantages: Payments from structured settlements typically are tax-free, providing long-term financial stability.

  • Customized Payment Schedules: They can be tailored to the plaintiff’s needs, offering flexibility to account for living expenses, medical bills, and future financial goals.

  • Protection from inflation: Certain annuities can be designed to increase over time, guarding against inflation.

  • Security: Annuities are backed by a life insurance company, offering reliability and trust in the promised compensation.

A structured settlement fosters long-term security and disciplined financial planning, which is particularly beneficial for retirement planning or in cases of permanent disability.

Types of Structured Settlement Payouts 

Structured settlements offer various payment options tailored to the claimant’s preferences and financial situation:

  1. Regular Monthly Payments: Structured settlements commonly provide regular monthly payments, offering stability and predictability in managing finances over time. This option suits individuals seeking a steady income stream. 
  2. A Large Initial Payment with Regular Monthly Payments: Some structured settlements allow for a significant initial payment followed by regular monthly payments. This arrangement provides an immediate lump sum for pressing financial needs while ensuring continued support through subsequent payments. 

Payment schedules can be customized to meet the claimant’s specific financial requirements, ensuring a balance between immediate financial needs and long-term financial security. Structured settlement arrangements prioritize the claimant’s financial well-being by offering flexibility and options that best suit their circumstances.

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The Process of Selling a Structured Settlement

Reasons to Sell Your Structured Settlement 

In our work at Conoscienti and Ledbetter, we often meet clients needing to convert their structured settlements into a lump-sum payment. Our clients seek immediate cash for various reasons, such as covering medical bills or addressing financial planning needs. We provide individually tailored advice on the complexities and legalities involved when one opts to sell a structured settlement.

The sale involves several steps, beginning with seeking a no-obligation quote from reputable settlement buyers. We diligently help clients understand the discount rate, potential loss of money, and tax implications, guided by the Internal Revenue Code, to make an informed decision.

Court approval is necessary for the transaction to protect sellers from impulsive spending or unfair terms. We ensure our clients are prepared for the court hearing, where a judge assesses the need for a lump sum and the agreement’s fairness. Note the Civil Division has a list of licensed brokers for structured settlement to deal with such payments. Ensure you go through the list. Our firm prides itself on compassionate representation, assisting in negotiating to secure favorable outcomes.

Clients must weigh their immediate needs against the benefits of structured settlement payment options, which could include a steady, tax-free income. In wrongful death cases settlements, it’s crucial to consider how selling might impact the death benefit intended for beneficiaries.

Federal and state regulations are strict to prevent exploitation, and we at Conoscienti and Ledbetter guarantee robust protection of your interests. For example, the Civil Division engages licensed structured settlement brokers to administer settlement funds appropriately.

Remember, while selling might offer immediate financial relief, careful consideration and professional guidance are crucial to avoid long-term disadvantages. Our commitment to honesty, integrity, and your best interests ensures we safeguard your financial future during such crucial transactions.

Evaluating Your Options

It would help if you weighed your options before deciding on selling your structured settlement payout. 

Pros

  • You get immediate access to cash for pressing financial needs such as medical expenses or debt repayment, offering financial relief.

  • Flexibility to use the large initial payment as desired, providing opportunities for investments or large purchases.

  • Avoidance of inflation’s potential impact on future payments, ensuring the present value of the settlement amount remains intact.

Cons

  • Reduction in the total payout compared to the structured settlement, potentially diminishing long-term financial security.

  • Loss of the structured nature of payments may have provided guaranteed income for living expenses.

How to Choose a Buyer

When selecting a structured settlement buyer, it’s essential to consider several factors to ensure you’re making an informed decision:

  • Research: Conduct thorough research on various structured settlement buyers. Compare multiple purchasers, considering reputation, customer reviews, and industry ratings.

  • Transparency: Opt for a buyer who provides clear and transparent information about the buying process, fees, and terms. Avoid companies with hidden fees or unclear contract terms.

  • Financial Stability: Select a buyer with financial stability and a solid reputation in the industry. Ensure the buyer has the financial resources to fulfill the agreement and provide the agreed-upon lump sum payment.

  • Legal Compliance: Ensure the buyer complies with all legal requirements and regulations governing structured settlement transactions. Verify the buyer’s licensure and accreditation to operate in your jurisdiction.

By considering these factors and conducting thorough due diligence, you can choose a reputable and trustworthy structured settlement buyer that meets your needs and ensures a smooth transaction process.

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    Conoscienti and Ledbetter: Your Partner in Structured Settlements

    Our Approach to Structured Settlement Payouts

    At Conoscienti and Ledbetter, we understand the intricacies of structured settlements and the vital role they play in securing your financial future following a personal injury or wrongful death claim. We can walk you through understanding car accidents if you or your loved one has been affected. 

    Our attorneys may help craft a settlement agreement that best suits your needs, taking into account factors like the projected payment schedule and potential needs for a special needs trust. We will negotiate your payout such that we maximize the payouts. 

    Making an Informed Decision

    Before selling your structured settlement, it’s crucial to thoroughly understand the implications and assess whether it’s the right decision for your financial situation. Here are some questions to consider:

    • Have you explored all alternative options for meeting your financial needs without selling your structured settlement?

    • What are the terms and conditions of the sale? (e.g., discount rate, fees, taxes)

    • What total amount will you receive after fees, taxes, and any other deductions?

    • How will selling your structured settlement impact my long-term financial stability and goals?

    • Are there any potential consequences or penalties for selling your structured settlement, such as losing future benefits or eligibility for government assistance programs?

    • Will selling your structured settlement impact your ability to meet ongoing financial obligations or future expenses?

    How We Can Help

     At Conoscienti and Ledbetter, with our experience and individualized service, we stand ready to defend your interests with integrity and compassion. Our process may involve going over all the pros and cons of structured settlement payouts and seeing if they align with your objectives and if they are a good idea. 

    Should you need further information or wish to discuss the possibilities of your structured settlement money, contact us for a comprehensive consultation tailored to your situation. Our experience extends to ensuring that families make informed decisions that safeguard their financial futures. You can contact us at 404-328-7276 to schedule a free consultation so that we can advise you on the possible next steps. 

    Let Us Help You With Your Structured Settlement Payout

    As discussed, structured settlement payments have their fair share of benefits, and getting the right legal partner to help you is essential. At Conoscienti and Ledbetter, we aim to offer you legal services so you don’t have to worry about making the right decision. Contact us today, and let’s help you get started. 

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