Illinois Personal Injury Lawyers: Understanding a Structured Settlement
When a plaintiff is awarded a large settlement in a lawsuit, they may be encouraged to accept the amount in the form of a structured settlement. A structured settlement, as opposed to a single lump sum payment, pays the amount in installments over a period of time. This is usually accomplished through the purchase of annuities.
While the structured settlement is often a smart move on the part of the plaintiff, it is always best to consult with your attorney before you sign on the dotted line. An experienced Chicago personal injury attorney will be able to advise their clients on the pros and cons of accepting the terms of a structured settlement.
One advantage to setting up a structured settlement is the possible tax benefits that may result. Depending upon the way the settlement is structured, the plaintiff may see a huge reduction in tax obligations. Another pro to accepting the structured settlement is to protect the funds for future needs. For example, if a plaintiff was injured in such a way that will require lifetime care, the money is guaranteed to be available. Minors also benefit from structured settlements, which can be disbursed for education or other expenses over time.
Illinois personal injury lawyers can also advise their plaintiffs about the disadvantages of a structured settlement. These may include the fact the money may not be available when needed. For example, if the plaintiff wants to purchase a home or car, they may be unable to do so at the time based on the terms of the structured settlement. Another consideration is that some people would do better to take a lump sum payment and invest the money themselves. There are a number of standard investments that will produce a greater long-term return than the structured settlement annuities.
Accepting or rejecting a structured settlement is a serious decision. Consult with an experienced Chicago personal injury attorney for more information on the subject if you are located in Illinois. Personal injury lawyers will take into account all the factors of your case and help you decide which type of payment would be most advantageous in your case.
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