Option to invest. There is also the option to invest the lump sum settlement. In some cases, it could result in a significant long-term return. Or it could allow for income to be received on a regular basis.
Cons of a Lump Sum Settlement
May spend money too quickly. It takes self-discipline to manage money wisely, but especially when suddenly in possession of a large amount. Despite good intentions, it could be easy for some people to spend it frivolously. Another issue is that the money could be spent on others who have unnecessary expectations for receiving financial help.
Tax disadvantages. There could be a significant tax burden with a lump sum settlement. This may depend on whether or not a portion of the award is considered income, which is taxable.
Each type of settlement agreements for a personal injury claim can have both advantages and disadvantages. It’s important to look at all aspects and talk with an attorney to learn which option is the best fit for your circumstances. Set up your consultation with Jason R. Schultz in Peachtree City today – 404-474-0804.