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Jason R. Schultz P.C

Q:
What are structured settlements?

A:

Occasionally, when a lawsuit, such as a personal injury suit stemming from a car accident in Peachtree City, is settled for a large sum of money, the attorney for the defense and the attorney for the plaintiff will arrange for what is called a structured settlement.

A structured settlement means that the defendant (or his or her insurance company) will pay the cash amount of the settlement over the period of a number of months or years rather than in a single lump sum. Payments can occur monthly, biannually or yearly, depending on the terms of the settlement. 

Advantages of a Structured Settlement

The primary advantage of a structured settlement has to do with paying taxes. A large single sum of cash can result in significant tax repercussions for a plaintiff, whereas spreading out payment across a number of years dissipates yearly reportable income. 

An additional advantage to the structured settlement is obvious for those who are not as good with money or are not ready to handle large dollar sums. For instance, a minor may benefit from a structured settlement that arranges for a portion of payments to be received upon reaching adulthood. Such funds can then be used for college, and are not in danger of being spent by family members, whether those family members are well-meaning or not. 

Special Considerations With a Structured Settlement

If you have entered into a structured settlement with an individual or insurance company you should beware the following pitfalls: 

  • Excessive commissions charged by an insurance company. 
  • Overstated value. Sometimes, a defendant will overstate the value of a structured settlement, which means ultimately that the plaintiff will not receive the full amount warranted in the agreement. Structured settlements are often set up as annuities, so it is important to make certain the net value of the settlement-including fees, commissions, and contingencies-equals the real value of the agreed upon settlement amount. As a defendant, you should review and compare structured settlement options just as you would review investment options. 
  • The life expectancy of the defendant should also be considered when arranging a structured settlement. 


Car accident lawsuits often result in structured settlements for the injured party.  It is important for victims to understand the options and obligations involved in a structured settlement. 

Contacting a Peachtree City Car Accident Lawyer

As the victim of a car accident in Peachtree City, you have rights that the insurance companies cannot ignore. While they have a team of lawyers working on their side, shouldn't you have experienced legal representation fighting for your best interests? Before accepting any settlement offer, order a FREE copy of our consumer guide, The Ultimate Guide to Accident Cases in Georgia - The Truth About Your Injury Case and contact the offices of Jason Schultz to schedule a FREE consultation on your case - 404-474-0804

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