WHAT IS A STRUCTURED SETTLEMENT AND HOW IS IT USED IN PRACTICE?
April 20, 2015
A structured settlement is a settlement where the injured person receives periodic payments over a number of years.
Typically an annuity is funded with money from a personal injury settlement. The annuity will pay out a guaranteed amount of money are regular intervals for an extended period of time. Structured settlements have there benefits in practice in numerous situations.
In Indiana medical malpractice claims before a claim can be made with the Patient Compensation Fund the defendant doctor and/or hospital has to pay $250,000. Sometimes it's in the patient's best interest to get most of the $250,000 in cash and the remainder of the monies in a structured settlement to meet the $250,000 threshold.
In settlements with minors, courts are hesitant to release the funds so structured settlements work well. for instance, a structured settlement could be set up to give a periodic payment every year from 18 to 24 and a lump sum payment when the child reaches 25 years old. Courts will approve structured settlements because it protects the child's money until they reach adulthood.
Finally, structured settlements can be used in some situations to protect an injured person's governmental or other types of benefits.
Overall, structured settlements can be used in certain cases. With a structure, injured person is able to realize more money in the long run with the safeguards in place to protect the money so it is there when needed.
If you have any questions about structured settlements after an Indiana accident, give me a call at (219) 874-4878.