The Importance of Working with an Experienced Lawyer When Choosing Insurance Company Payouts for Structured Settlements
Introduction
If you have found yourself in a situation where you are receiving payments from an insurance company as part of a structured settlement, congratulations. You have successfully navigated the legal system and secured your financial future in the face of whatever adversity brought about the settlement. However, it's important to remember that this is just the beginning of your journey. You now have to make some critical decisions about how you will receive your payouts over time, and that's where an experienced lawyer can be an invaluable resource.
What is a Structured Settlement?
First, let's establish what a structured settlement is. When a plaintiff wins a lawsuit, they may be awarded a lump sum payment from the defendant. In some cases, however, a structured settlement may be established instead. This means that the plaintiff will receive payouts over time, rather than a single lump sum. These payouts can be made annually, bi-annually, quarterly, or even monthly.
There are many reasons why someone might choose a structured settlement over a lump sum payment. For one, it can help to ensure that the plaintiff receives a steady stream of income over time, rather than being tempted to spend everything at once. Additionally, structured settlements can offer tax benefits that lump sum payments do not.
The Importance of Choosing the Right Payout Option
When it comes to structured settlements, choosing the right payout option is critical. This will impact how much money you receive over time, how often you receive it, and when your payments will stop. Additionally, different payout options can offer different tax advantages.
Your insurance company will likely offer you several different payout options to choose from. Some of the most common include:
- Lump sum payment – This option allows you to receive all of your settlement money at once. However, keep in mind that this may come with tax consequences.
- Life with period certain – Under this option, you will receive payments for a specific number of years, even if you pass away before the end of that period. After that period of time has elapsed, your payments will stop.
- Life only – This option provides payments for as long as you live. However, once you pass away, your payments will stop.
- Joint and survivor – This option provides payments to both you and a designated beneficiary. Once one of you passes away, the survivor will continue to receive payments for the rest of their life.
Deciding which option is right for you will depend on a variety of factors, including your expected lifespan, your financial goals, and your tax situation.
Why You Need a Lawyer
While your insurance company may be willing to help you choose a payout option, it's important to remember that they are a business. Their goal is to maximize their profits, which may not align with your best interests. Additionally, insurance company representatives may not have the legal expertise necessary to help you make an informed decision.
This is why it's critical to work with an experienced lawyer when choosing your payout option. A lawyer can help you to understand the legal implications of each option, as well as the tax consequences. They can also negotiate with your insurance company to ensure that you receive the best possible payout terms.
Conclusion
While you may have already jumped through numerous legal hoops to secure your structured settlement, the work is far from over. Choosing the right payout option can make a huge difference in your financial future. That's why it's essential to work with an experienced lawyer who can help you navigate this complex decision-making process. With their guidance, you can rest assured that you are making informed choices that will set you up for long-term success.