WHEN SHOULD YOU CONSIDER A “QUALIFIED” (TAX-FREE) STRUCTURED SETTLEMENT?

When:

• A minor, an incapacitated adult, or an elderly plaintiff is involved.
• Income replacement is important.
• The plaintiff isn’t an experienced financial expert.  Even if he or she is, a structure may still be a good option to consider.
• The plaintiff is risk averse.  Many financial vehicles come with risk, which many plaintiffs and their families are not excited about.
• High wage earners who find themselves in a high income-tax bracket.  Structured settlement benefits are income-tax free, a definite bonus to someone who already pays large sums of income-tax each year.
• The plaintiff is on public benefits, such as Medicaid.  A structured settlement can guarantee a lifetime income that pays into a Special Needs Trust, ensuring they remain eligible for their public benefits.
• The plaintiff isn’t considered legally “incapacitated,” but may be vulnerable to people who would be harmful to the preservation of the settlement proceeds.

More information:
Structured Settlements

WHEN SHOULD YOU CONSIDER A “NON-QUALIFIED” (TAX-DEFERRED) STRUCTURED SETTLEMENT IN A NON-PHYSICAL INJURY CASE?

When:

• Income replacement is important.
• The plaintiff isn’t an experienced financial expert.  Even if he or she is, a structure may still be a good option to consider.
• The plaintiff is risk averse.  Many financial vehicles come with risk, which many plaintiffs and their families are not excited about.
• High wage earners may not need the money at the time of settlement.  They can let the funds grow tax-deferred.
• The plaintiff isn’t considered legally “incapacitated,” but may be vulnerable to people who would be harmful to the preservation of the settlement proceeds.