What are Structured Settlements?
A structured settlement is the settlement of a claim or lawsuit by means of immediate cash combined with customized, tax-favored periodic payments designed to meet specific future needs. Structured settlements are secure and guaranteed investment vehicles that protect Claimants from early dissipation and provide higher total payouts, while expediting case resolution.
The Nitty Gritty
Payments structured for physical injury claims are income tax-free. Payments structured for other types of claims are tax-deferred. In all cases, structured settlement recipients may avoid paying the higher taxes associated with lump sum settlements.