Critical Benefits of a Structured Settlement to the Injured Party
The work of a personal injury attorney is extremely
rewarding. Not only are you fighting for the little guy & seeking justice
for your client(s), you are also paving the way towards making a human being
whole again. The hardest battle is certainly defending your client(s) &
fighting for their settlement award. However, there is also another battle that
must be won – and that has do with securing the future of the client(s), making
sure that everything is put into place to keep that person whole for the rest
of their life. While we do have a slight bias on how that may be done, we can
all agree that by relentlessly fighting and helping the client(s) win both of
the battles mentioned above – that is where true seeking of justice is found.
I’d like to make the case for Structured Settlements in the following paragraphs, specific to the point mentioned above – that truly seeking justice for the client has to do with both (1) fighting for their settlement award & (2) securing their future. Ultimately, if both of these are not achieved, it would be impossible to truly make one’s client(s) whole again.
Every case is different, but no matter to what degree of injury – the life of the injured party is going to dramatically change. For most personal injury cases, a big part of that change has to do with immediate & future medical needs, lifestyle changes, & loss of work. With those changes, comes a lot of new expenses that would not have been needed before the “accident”. Therefore, the most important piece to the puzzle (after settlement) to make sure a client remains whole for their entire life after injury – is guaranteeing that the settlement award that your client(s) receive(s) is able to pay for (cover) everything that they will need for their new future.
Whether the case involves a minor or an adult, or if the case results in a small or giant settlement amount – true justice for the client would be found in seeking all options that make sense, given the future needs of the injured party. As noted above that every case/client is different, we still strongly believe that providing a Structured Settlement to the injured party as an alternative to a lump-sum is an act of seeking true justice for the client & is ultimately providing options that are in the best interest of the injured party. Specifically, in cases where life care planning is needed, future medical needs are projected to be astronomical, and Special Needs Trusts must be established – Structured Settlements should certainly be in the financial life planning conversation for the injured party. To add to that point, it also must be noted that if the injured party has dependents – there are also other items to plan for, such as the education of children, spousal support, & retirement savings. While all of these items encompass more of an overall financial life planning bucket, the fact that the injured party is able to take advantage of the tax-free benefits of a Structured Settlement – it is worth anchoring the “planning” around this tax-advantaged vehicle.
Below are some of the critical benefits of a Structured Settlement to the injured party that we truly believe must be considered if one’s goal is to seek true justice for the client by making them whole again, and forever:
Whether an injured party takes their settlement award as a lump-sum or as a Structured Settlement periodic payment, that money is tax-free no matter what. That is the benefit inherent within the tax code associated with personal injury settlements. However, if a client chooses to put their settlement award into a Structured Settlement – the interest earned is income tax-exempt. For an individual that decides to take the lump-sum, and invest it into something else (i.e. individual taxable account), the interest earned on that account is going to be taxed as ordinary income tax.
Guaranteed Income To Match Future Needs:
The reality of the matter is that in most of these cases, we are dealing with a large amount of money relative to the recipient (injured party). Because of that, we must be aware of the potential of mismanagement of the money. Part of that can come from poor planning, purchasing unnecessary items, giving money away to family/relatives, & underestimating the future medical expenses. One way that Structured Settlements mitigate for those potential risks, is by setting up varying income streams specific to the needs of the client. If we have a life care plan that shows that a high-cost medical procedure will be needed in ten years, while at the same time, our client wants to fund their son’s college in eighteen years – we can easily generate guaranteed income for those years, in addition to the client’s monthly income needs.
Guaranteed Rate Of Return & Safety:
Because Structured Settlements are fixed annuities, they will pay the exact amount that was initially illustrated in the quote found in the annuity contract. On top of that, since Structured Settlements are offered by the top-rated life insurance companies – there is another layer of guarantee that a settlement recipient can benefit from. Finally, because we are dealing with a fixed product – there is nothing that is tied to the stock market or a variable product – allowing for the settlement recipient to avoid the ups & downs of the market. While some may argue that the fixed rate is boring or does not provide enough upside, we must not forget that we are dealing with a settlement recipient that cannot risk losing this money. Therefore, having a fixed return is most beneficial.
Protection Against Creditors:
If our goal is to protect the future needs of the client, then it is important that we do everything we can to make sure that the settlement award is safe, secure, and protected. In most states, Structured Settlement annuities are protected from the claims of creditors.
No Management Fees Or Ongoing Expenses:
One benefit and difference when compared to other investment options, is that Structured Settlements do not have ongoing expenses or management fees. With this and the fact that Structured Settlements are tax-free (principle and interest), we are able to not allow the client’s net amount be diminished by costs that are traditionally associated with other investment vehicles, thus maximizing net return.
While the list above is not exhaustive, it is safe to say that these critical benefits of Structured Settlements have high merit when considering the needs of a personal injury plaintiff. In addition, if the goal of the personal injury attorney is to truly seek justice for their client after they have tirelessly gone to war to retain their settlement award, we hope that they would also consider the above-mentioned benefits to Structured Settlements when fighting that last battle of helping their client secure their future. The great part about that last battle, is that you can leverage our team to make sure the end-goal of making your client whole again is reached & sustained. We’d love to be a part of your team that ultimately finds the true justice that your client deserves.
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