More and more people are choosing structured settlements these days. Most common are those who have been injured in a road accident and need money from his/her settlement immediately to pay for medical bills, and prefer to have it now than wait for a large sum of money that may come later.
Before deciding whether you should opt for a structured settlement, be sure to weigh the pros and cons first. A structured settlement may be a good idea if you need money for recurring medical expenses on due to your injury or expect prolonged physical therapy in order to recuperate.
The payment in case of a structured settlement is usually made from interest accruing on a purchased annuity. A structured settlement is binding so once the agreement has been signed, you cannot change your mind about it. If you wish to modify the agreement later because of some unforeseen expenses, you need to go to an attorney to change the terms of your agreement. You cannot use your structured settlement to obtain a new loan either.
There are companies that will purchase the rights to your structured settlement for a lump sum of cash, but they are in it for the investment potential. They will pay you the current day value of your settlement amount, excluding the invested sum. The rules do vary in different states regarding structured settlements. The amount received from structured settlements is taxable in some states.
If you are consulting an attorney to help you with your structured settlement, be sure you fully assess your situation and requirements carefully. Some things to consider before making a decision are:
What are the pros and cons of the program? Does the attorney have previous experience in negotiating structured settlements? What is better suited for your own unique situation, a structured settlement or a lump sum of money? Will you get any tax benefit by opting for a structured settlement? Will you get enough money fast enough to cover all your expenses? What happens in case of future contingencies, and if your requirement for money increases? Will you be able to change the terms of the structured settlement later? Can you decide to change the program and opt for a lump sum payment at a later date?
Don’t forget to prepare a list of specific questions before you speak to a lawyer. Meeting with the lawyer will help you deicde whether he/she is the right person to handle the negotiation of your structured settlement. You should have no doubt in your mind that your lawyer has your best interest at heart, and if you do have doubts, get a second opinion or consult with your own financial planner.
After you have had all your questions answered, you can already make an informed decision. Remember that this is a very important decision to make, as it will affect not only your future but your family’s as well. So enter into an agreement only if you are completely sure that you have made the right decision.