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About Structured Settlement
A structured settlement is a financial or insurance arrangement, including periodic payments that a claimant accepts to resolve a personal injury tort claim or to compromise a statutory periodic payment obligation.
Because structured settlements have become so widespread, the US has created federal and state laws to regulate them. Additional laws such as those regarding Medicaid and Medicare also affect structured settlements, but those who receive structured settlements can often continue to use their Medicare and Medicaid benefits.
A structured settlement is an alternative to the lump sum settlement used in the US. This type of settlement is paid through periodic installments rather than through one large payment. Most structured settlements are paid through annual installments, but it is also possible to be paid in larger sums every few years.
Several people were killed in an explosion which damaged a city building. After subtracting attorney fees from the settlement funds, the surviving families members were left with about $9 million. However, from that $9 million, the city was owed approximately $2.4 million for damages. In the end, a dozen families were left with only $6.6 million in settlement funds.
ADDITIONAL
INFORMATION
Structured settlements may include income tax and spendthrift requirements as well as benefits. Structured settlement payments are sometimes called periodic payments. If a structured settlement incorporated into a trial judgment is called a periodic payment judgment.
In order to provide the families with as much money as possible, the structured settlement
broker asked city officials if they would agree to take their $2.4 million in five
periodic payments instead of a lump sum. The city agreed to defer payment. The five
annual payments of $480,000 to the city reduced the cost of the property damage portion
of the settlement which freed up additional funds for the families. By obtaining
a special quote and bundling the annuities, the structured settlement broker from
Ringler Associates not only helped to conclude the case but was able to provide the
families with more money than they would have received in a lump-
The system of structured settlements was first introduced in Canada in the early 1970’s and spread into the United States very quickly. Within a few years, the idea had found its way to many countries including Australia and most member states of the European Union. Structured settlements are now part of the statutory tort law of several common law countries including Australia, Canada, England and the United States. Although some uniformity exists, each of these countries has its own definitions, rules and standards for structured settlements.
Creative thinking, asking questions and listening can lead to a more beneficial outcome for all parties involved in the settlement process. The structured annuity to the city provided a savings of $340,000 that was distributed to the families of the decedents, all of whom were residents of the city.