Should You Avoid Structured Settlement Cash Arrangements?
Doug Smith

Defined Tag: Structured Settlement Cash.

Where structured settlement cash awards are concerned, judgment payments have become a well known part of the legal system in the U.S. You read about structured settlements and hear about them on TV.

If you are considering a structured payment plan, there are some important things to consider. It may be a good idea to take some time out and educate yourself with how the process works. It may be wise to retain an attorney, before you proceed with a settlement. This can help you with possible hassles in the future when considering settling for cash or a regular annuity settlement.

What Is The Best Option?

Here is what you must decide with a large settlement: are you better off taking a large lump sum now, or should you consider alternatives to the immediate large payout? This is not easy to answer. In some cases the client may not be proficient with money management. A large payout can attract people who may want to take advantage of the financially unsophisticated settlement recipient. The lump sum will be smaller than the total amount agreed upon at the settlement hearing, so plaintiffs receiving such windfalls may not manage that money well.

This is where an organized payment plan really helps. In 1982, Congress passed legislation to assist people receiving large payments and the entities who take care of them. Congress added a federal tax code provision providing an alternative to large cash payments. This alternative is called a structured settlement. This gives a large award recipient a better way to manage their financial future.

Retain An Experienced Attorney To Avoid Scams

Hire an experienced lawyer to help you with a structured time-based payment plan. The lawyer will explain the details. When a person gets a large payout, they might be approached with a sales pitch of getting lots of cash fast or cash right now. This may not be the best alternative for many people for long term financial security.

Some people get taken advantage of when they settle for a cash pay out that can sometimes be only HALF the value of the total future payments. A structured annuity can be a wise decision for tax reasons alone. A good lawyer can help you avoid the lure of quick cash from companies who target recipients of large payout settlements. If your lawyer can't explain the pros and cons of a fast cash payout, get another lawyer.

Is It Tax Free?

To create a periodic payment settlement, an annuity is purchased and held by an independent third party insurance company. This neutral third party makes payments to the individual to whom they have been awarded. This is why a structured settlement can be completely tax free.

Hire An Attorney First

There are many important factors associated with a annualized settlement payments. This is not offered as legal advice. Rather, it is offered as a simple guideline to give you some ideas before proceeding agreeing to receive periodic cash payments over time.

Be sure to retain a attorney that specializes in structured settlement cash payouts, because you can afford it now!

This article is Copyright 2009 by Doug Smith. All Rights Reserved Worldwide. Unauthorized Duplication Prohibited. For Entertainment Purposes Only. Not Intended As Financial Advice. Consult Your Own Financial Professional.