Insightful Information On Structured Settlement

Various companies are interested in purchasing your structured settlements or selling the settlement for a lump sum buyout. Nearly all the states have restricted the sale of structured settlements.

Hartford, TX (prHWY.com) January 28, 2013 - United States, 24 January 2013 - At times when a claimant settles a certain case for a huge sum of cash, the financial planner consulted in connection with the settlement, the plaintiff's attorney of the defender may propose to pay that amount in a number of installments rather than as a lump sum. When such a settlement is paid in this manner, it is referred to as a structured settlement. Normally, the structured settlement will be established via the buying of one or more annuities, to make sure the defendant makes future payments. The money can be paid in almost any schedules the parties will agree on.
A structured settlement comes with various advantages. One of the most notable benefits is tax avoidance. With a suitable set up, the plaintiff can reduce his or her tax obligations significantly with a structured settlement. In some instance, he or she may even get to receive the settlement tax-free. Another notable advantage of structured settlements is safeguarding the plaintiff from having the settlement money dissipated, when it is needed to pay for future needs or care. At times, a structured settlement protects the plaintiff him or herself. Some people do not know how to manage money well and if given a lump sum they will squander it all fast.

When you settle a case with a huge sum, often everyone from your attorney to your friends, family and relatives want a share of the wealth. If you receive this settlement as a lump sum, it would be hard to say no to them. Having a structured settlement will discourage them from asking you for a part of the money. A structured settlement may also benefit minors and youths to pay for educational expenses such as college. An injured individual can use the periodic installments of a settlement to purchase new equipment.

Structured settlements do have their fair share of downsides. For instance, those who agree to these settlements feel trapped. They may want to purchase a new home, car or other expensive property but cannot since they do not have enough capital. Under the settlement, they cannot borrow against future payments thus; they would not be able to master resources to buy what they want. Accepting a lump sum instead of a structured settlement may enable you to invest the money, which might give higher returns than the sell annuity payments in the structured payments.

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Tag Words: sell annuities, structured settlement, sell annuity payments

Categories: Business

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