Not every plaintiff receives his or her compensation package as a lump sum payment. It could get delivered in the form of a structured settlement.
What is a structured settlement?
It is an arrangement agreed to by both the court and the plaintiff. According to that arrangement, the plaintiff gets regular payments over an extended period of time.
What benefits does a plaintiff enjoy with a structured settlement?
A pre-determined amount of the compensation package gets sent to the plaintiff each month. The plaintiff seldom needs to pay a tax on any money from the structured settlement. They have the chance to arrange for each payment to satisfy a particular need. If the plaintiff so desires, some type of structured distribution of funds can be combined with the awarding of a lump sum of money.
A payment might get used to cover an emergency. Personal injury lawyer in Edmonton know that if both sides were to like a proposed structured settlement, then their awareness of that possible conclusion could expedite the creation of an agreement.
What drawbacks have been associated with agreeing to the delivery of a structured settlement?
The plaintiff does not have a chance to think about investing the awarded money. Plaintiffs that receive a lump sum of money do enjoy the opportunity to invest at least a part of that large payment. The government might be able to tax some portion of the structured settlement. For instance, if any of the funds had come from punitive damages, those same funds could be taxed.
The structure does not account for the emergence of unanticipated changes in the economy. The monthly payment might not provide enough money for covering the costs of a large emergency. That is why a new type of service has been created. That new service arranges for the ending a given structured settlement.
Are there times when a plaintiff must rule out the idea of requesting a structured settlement?
Yes, that would be the case if the plaintiff had chosen to obtain a loan, in order to handle his or her finances, while awaiting the ruling of the jury. The institution that granted the loan would want to have it repaid as soon as the plaintiff had won his or her case.
Payment of the full loan would not be possible if funds were sent to the plaintiff in small portions. Each portion would fall far below the amount of money that the lender had anticipated.
Moreover, the lender would not want to wait for a sufficient amount of time to pass, in order to allow for delivery of the desired sum of money. That list of facts underscores the reason that a plaintiff that has taken out a loan could not consider agreeing to a structured settlement.