Committed to Excellence and Personal Attention

  1. Home
  2.  » 
  3. Personal Injury
  4.  » 3 things to know about structured settlements


Nobody wants to be in an accident or suffer an injury due to someone else’s negligence, but it happens every day in California. As long as there are people, there will be personal injury cases because people make bad decisions that lead to injuries. If you have been a victim of someone else’s negligence and went to court with your personal injury case, then you may be aware of something called a structured settlement.

structured settlement, according to Forbes, is when the award from a lawsuit is paid to you over time. For example, instead of getting a $1 million award all at once, the other party may pay you $50,000 a year until he or she reaches the total owed. There are some things about this type of arrangement that you need to understand before you agree to one.

  1. It does not allow the other party to get out of paying

One concern you may have about a structured settlement is what happens if the other party cannot make a payment. The good news is that is not how this works. The other party must pay all the money upfront to a company that will then manage the payments. So, there is no worry that you will not get your money because the other party cannot pay down the road.

  1. It can save on taxes

The tax laws exempt personal injury settlements from tax obligations, so you do not pay taxes on the money ever. However, if you get the money and then put it in an account, you may have to pay taxes on it, especially if it earns interest. By doing a structured settlement, you get the money over time, so you can spend as you need it without having to put it into an account.

  1. They are flexible

You have a lot of say into how your settlement is set up. You can choose how much you will receive and how often. You could even pause the payments until down the road and use it as your retirement plan.

A structured settlement can come in handy if you are receiving a very large payout from your personal injury case. At the very least, you may want to look into the option.