One of the more attractive things that annuity buyers are drawn to is structured settlements. It’s easy to understand why. When a claimant receives periodic payments from an injury lawsuit, this settlement is usually given to them on a periodic basis. However, the claimant may have to submit additional requests for additional payments if they desire, or need, additional money for living expenses, medical bills, etc.
The structured settlement annuities are given in fixed payments that are relatively long-term; that is, even if the claimant is not able to work for a living, he/she can potentially receive a substantial amount of money over time. But what should a claimant do if he/she wants more than the initial settlement? Many people who are injured in accidents decide to sell their settlement plans in order to maximize their potential to receive additional funds. There are many individuals who decide to use a structured settlement consultant to assist them in creating a plan that will allow them to receive a higher sum of money in the future.
A structured settlement annuity is often a way that an injured claimant decides to pay their medical bills and other related expenses over time rather than receiving a lump sum payment when the case is settled. The structured settlements annuities can also be used to provide needed funds for home care or to pay for educational costs of the injured claimant’s children. Whatever a claimant’s needs may be, a structured settlement annuity can provide them with the extra income that they may need in order to achieve their financial goals. This type of plan can help ensure that the injured claimant receives his/her fair share of the money from a court settlement.
Structured Settlements Annuities – Tax-Free Annuity Payments
Structured settlements annuities refer to individual settlements for injuries that were awarded to claimants in civil and criminal courts. These payments can be structured to fit the claimant’s budget and needs. The payments may be paid once a month, semi-annually, annually, or through some combination of all three. They are payable either semi-annually or annually in fixed amounts, which can range from one hundred and fifty dollars to ten million dollars, or at times even higher. In some cases the court decides that the claimant will not have enough money after making the structured settlement to meet his or her needs; in such cases, extra payments could be made until the case is resolved, or new terms may be agreed upon.
Structured settlements annuities are typically settled with the help of a structured settlement consultant. The structured settlement consultant serves as the mediator between the two sides in the settlement negotiations. He or she is responsible for assessing the case, discussing the compensation issues with the claimant and his or her lawyer, and finally determining the best possible settlement amount for both the claimant and the defendant. Once the settlement consultant has determined the amount of money that will be paid out to the claimant, he or she then goes through the negotiations with the defendant and the insurance or court settlement provider on behalf of the claimant.
It is important to remember that structured settlements annuities are not tax-free. The U.S. tax law does not require that the settlement payout a taxable lump sum; instead, the payment is treated as an annuity for tax purposes. However, the tax rules are very complicated, and changing laws can impact the amount of money you could potentially get in your structured settlement annuities. This is why it is very important for you to work with an experienced accountant who has worked on similar cases to yours to understand all the details of your settlement. You should also be aware that the accounting treatment of structured settlements annuities varies widely from state to state, so it is necessary for you to consult with someone who can explain which accounting rules apply to your specific state.
Structured settlements are an important part of personal injury law, and can be quite useful in certain circumstances. For example, if the victim of an accident has to undergo medical treatment that will cost him or her a lot of money, he or she may agree to sell some or all of the settlement funds to get the money that is needed for his or her treatment. In this manner, structured settlements can provide a steady income for victims who may need it to support them while they recover from injuries that have caused them financial and/or personal hardships. However, sometimes structured settlements don’t work out the way people want, and some plaintiffs may be left with nothing at all. This is why insurance companies that pay structured settlements on a regular basis can sometimes be a good option to pursue.
When the victim sells some or all of the settlement annuities, he or she does not have to pay taxes on the money that he or she receives, since the sale is a tax-free transfer. However, if the sale amount is greater than what the person or his or her settlement consultants need to provide for him or her, the settlement consultant may be required to pay taxes on the excess. Insurance companies that purchase structured settlements annuities also do not have to pay taxes on the money they receive. However, if the excess is higher than what the insurance company needs to pay out over time, they can also be subject to additional tax charges.
There are several advantages to purchasing structured settlements annuity instead of monthly payments. The first advantage is that the periodic payments given to injured claimants are generally less than the actual costs they would have to pay if they had to pay their own medical bills. For instance, if the claimant’s car breaks down and he is stranded on the side of the road with no vehicle lights or other emergency signs, he or she will likely receive a phone call from an auto accident attorney who will advise him or her on how to proceed. At this point, the claimant should decide whether or not to get off of the roadway. If the auto accident lawyer recommends that the claimant take a ride to a nearby hotel to get some fresh air, or to a physician or nursing home, the claimant should do so. By making periodic payments to structured settlements annuity, he or she is less likely to miss work due to being ill or incapacitated due to being stranded on the road.