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Accident Structured Settlements
Denver and Aurora Personal Injury AttorneyA car accident occurs approximately every 4 to 5 seconds someplace in the world. This means that at some point in your life, you (or someone you love) will likely be involved in a car accident – and may require the services of an Personal Injury attorney. If you have been severely injured in an accident, your attorney will need to seek the maximum compensation for your injuries – and this usually comes in the form of a lawsuit. The majority of personal injury lawsuits never make it to trial. Insurance companies are usually more eager to settle out of court and as such, your attorney will be able to negotiate a fair and accurate settlement. Traditionally, settlements were paid out all at once, in a lump sum amount. But lately, structured settlements have gained popularity because of their increased benefit to the injured party.
What is a Structured Settlement?A structured settlement is a financial arrangement between the plaintiff and the defendant. This type of settlement is used as an alternative to a settlement where a lump sum is paid to the plaintiff. In a structured settlement, the defendant makes multiple payments to the plaintiff as specified in the agreement. These payments can be over months or over years. Typically a structured settlement is paid out through the purchase of an annuity or through assignment, where a third party takes on the obligation to make the payments.
Reasons to Choose Structured Settlements:There are many reasons why a structured settlement may be the wisest choice when the recovery will be a relatively large sum of money, including:
- People who receive a lump sum may end up blowing it all at once by making poor financial choices rather than spending and investing the money wisely. Thus, these people may end up penniless within a short amount of time. Periodic payments assist such people in maintaining a steady cash flow.
- Structured settlements help keep greedy relatives at bay by preventing them from taking the money and using it for themselves while the injured party is recuperating.
- Structured settlements are focused on the injured party’s long term needs
- There are tax advantages to not receiving a settlement in one lump sum