Pros and Cons of Structured Settlements
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by: Jimmy Benjamin
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Word Count: 383
Date: Sun, 22 Nov 2009 Time: 6:28 PM
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If you are involved in a court settlement process, you may be awarded a structured settlement instead of a lump sum award. Your structured settlement can actually provide you with a number of great benefits regarding taxes, allowing you to pocket the largest portion of your settlement possible.
Next, structured settlements help people manage their settlement money. Especially for those who struggle to stick to a budget or have a difficult time saying no to friends and relatives who would hope to receive some of the money, a structured settlement can provide a way for the recipient to have long term financial security.
Settlement payments are except from a number of court orders or decrees including divorce and credit payments. Further, settlement payments can be added to social security benefits as they become available. Security is also found in these regulations that ensure that life events will not touch your payments.
For recipients with severe disabilities, settlement money can be put in a special needs trust fund. Doing so allows medical expenses not covered by Medicaid or government allowances to be paid without any other issues.
Injured recipients can really benefit from a structured settlement as the payments can help to fund medical equipment or customized vehicles or home features. These purchases might otherwise be impossible or be severely limited by a person's financial state. The structured settlement can provide for long term, comfortable living.
Structured settlements however, are not for everyone. Some people have found that selling some or all of their structured settlement provides a better option. Trading your settlement payments for a lump sum can help you get out of debt or allow you to invest.
There are options that allow you to see all or some of your payments from a settlement for a lump sum. This money can then be used to buy a home, car, or pay for education costs that may have otherwise been impossible.
Finally, selling your structured settlement can help you beat inflation because your money will have far more purchasing power now than it will in ten years, based standard inflation rates. Many companies have the ability to help you do this while still keeping your money tax free.
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A structured settlement can help you pay for medical treatment and equipment over time. Occasionally though, it is more appropriate to sell structured settlements so that you can provide a large purchase.
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