A structured settlement is an innovative alternative to an all-cash (or “lump-sum”) settlement in a personal injury lawsuit. The voluntary agreement between the injury victim/plaintiff and the defendant involves paying settlement compensation to an injured party over time.

Under a structured settlement, the settlement award is designed according to a fixed schedule. The settlement award can be diversified by having a portion paid in upfront cash to satisfy immediate needs such as attorney fees, case expenses, liens, and net cash to the plaintiff. The remaining portion is designed as a series of payments over any length of time – often for the rest of the plaintiff’s life.

The structured settlement process happens before the defendants and/or their insurer pay the settlement award to the plaintiffs. The design process, document drafting, and funding process are part of the work product that must be completed in advance, not after funding the settlement award or execution of documents.

Unlike traditional annuities available to the general public, such as Single Premium Immediate Annuities (SPIA) and Single Premium Deferred Annuities (SPDA), the structured settlement annuity is available only to personal injury victims and/or the plaintiff’s attorney’s fees. The structured settlement annuity differs also in that it provides tax-free principal and interest, and offers more customized and flexible payment designs.

Learn more by contacting ROBINYOUNG & COMPANY.