If you are currently in the midst of a personal injury case, you may have been offered a structured settlement. This means that you will receive an annuity that pays out payments over a long period rather than one lump sum. Although the idea of getting a lump sum might seem more appealing, there are a few reasons why you may want to accept a structured settlement instead. These are a few reasons why.
1. A Structured Settlement is Tax-Free
First of all, a structured settlement can provide you with tax benefits when compared to a lump sum payment. In many cases, you have to file a lump sum payment on your income taxes as a form of income, which means that you could be stuck paying out a significant amount in taxes. In most cases, however, a structured settlement is tax-free.
2. You Can Ensure That Your Funds Last
It can be hard to manage a lump sum. Unfortunately, it can be easy to be tempted to spend too much when you have a large sum of cash in the bank. If you spend all of your money, however, you could find yourself struggling to make ends meet later on, especially if your injury is still affecting your ability to work.
3. You May Receive a Higher Payout and a Faster Agreement
Structured settlements also offer benefits to the parties that pay them out. This means that you might be offered a higher payout amount if you are willing to take it in the form of a structured settlement. In many cases, the structured settlement option allows the attorneys on both sides to negotiate. If you agree to this type of payment, you might find that you are offered more money and that the case is settled more quickly out of court, which can save money in legal fees and can allow you to put the situation behind you.
If you are currently awaiting a settlement for a personal injury, your lawyer may have talked to you about accepting a structured settlement instead of asking for a lump sum. Even though you might prefer the idea of getting all of your money at one time, you should at least consider this option. As you can see, a structured settlement can have its benefits. Along with these three advantages, your personal injury lawyer can talk to you about the other benefits that you can enjoy as well.
To learn more, contact a law firm like Tiefenthaler Law Office.
