Structured Settlement

A structured settlement is a financial or insurance arrangement, including periodic payments, that a claimant accepts to resolve a personal injury tort claim or to compromise a statutory periodic payment obligation. Structured settlements were first utilized in Canada and the United States during the 1970s as an alternative to lump sum settlements. Structured settlements are now part of the statutory tort law of several common law countries including: Australia, Canada, England and the United States. Although some uniformity exists, each of these countries has its own definitions, rules and standards for structured settlement. Structured settlements may include income tax and spendthrift requirements as well as benefits. Structured settlement payments are sometimes called “periodic payments”. A structured settlement incorporated into a trial judgment is called a “periodic payment judgment”.

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Structured Settlements in the United States
The United States has enacted structured settlement laws and regulations at both the federal and state levels. Federal structured settlement laws include sections of the Federal Internal Revenue Code. State structured settlement laws include structured settlement protection statutes and periodic payment of judgment statutes. Medicaid and Medicare laws and regulations impact structured settlements. To preserve a claimant’s Medicare and Medicaid benefits, structured settlement payments may be incorporated into “Medicare Set Aside Arrangements” and “Special Needs Trusts”.

Definitions
The United States defines “structured settlement” for Federal income taxation purposes in Internal Revenue Code Section 5891 (c) (1) as an "arrangement" that meets the following requirements:
* A structured settlement must be established by:
* A suit or agreement for periodic payment of damages excludable from gross income under Internal Revenue Code Section 104(a)(2); or
* An agreement for the periodic payment of compensation under any workers’ compensation law excludable under Internal Revenue Code Section 104(a)(1); and* The periodic payments must be of the character described in subparagraphs (A) and (B) of Internal Revenue Code Section 130(c)(2) and must be payable by a person who:
* Is a party to the suit or agreement or to a workers compensation claims; or
* By a person who has assumed the liability for such periodic payments under a Qualified Assignment in accordance with Internal Revenue Code Section 130.

More About Structured Settlements.
For nearly 20 years, the federal government has recognized and encouraged the use of structured settlements in personal injury cases.  Structured settlements have also attracted strong support from plaintiff attorneys, state attorneys general, legislators, judges, and consumer and disability advocates.

If you would like additional information about structured settlements, please contact a structured settlement broker or a life insurance company in your area.

Sometimes better returns and excellent security. If you choose a structured settlement to resolve an injury or wrongful death claim, you’ll get more than guaranteed payments and peace-of-mind.

A structured settlement is a series of payments made over a period of time. People usually get them as a result of a lawsuit. For various reasons, people who receive these payments, sometimes wish to cash them out and get a lump sum payment. There are a number of companies around who are willing to do this.

See:
* Annuity
* Common law
* Disability
* Medicaid
* Medicare
* Special needs trust
* Structured settlement factoring transaction
* Tort
* Tort reform

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Also see:
• Annuity
• Unclaimed Money
• Structured Settlements

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This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article "Structured Settlement".