A structured settlement is a win-win

Before the advent of annuity settlements as a type of settlement payments, defendants were often overwhelmed by the fact that they had to accept the lump sum of their compensation all at once. Even when the defendant is a large company, extracting large sums of money from its funds to comply with the agreement was definitely not a favorable business practice. The same is true for the plaintiff, who is suddenly overwhelmed with having to come up with an effective and properly managed plan for his finances.

There are also many cases of a plaintiff or plaintiffs squandering their settlements. Spending sprees and poor judgment have caused many cash settlement recipients to end up in financial distress. Therefore, the structured settlement was a good option to overcome the drawbacks of a one-time cash payment.

The advantages associated with payments over time definitely outweigh the disadvantages, and it is very common for many cases involving loss or injury to be resolved through the implementation of a structured settlement. In most cases, when the plaintiff requests a lump sum settlement, he must prove to the court that he has reasonable and substantial out-of-pocket expenses. The most frequently cited type of expense is associated with career changes, high medical expenses, and also educational costs for children.

These guarantees subsequently make a structured settlement beneficial to both parties, the defendant and the plaintiff. Of course, you can also choose to sell your structured settlement. You have the right to, at any given time; sell the agreement to convert it to a lump sum, but you may not be able to convert the lump sum into structured payments as easily.

As mentioned above, structured settlements are favorable to all parties involved in the dispute or case. The plaintiff will realize several different advantages to accepting a structured settlement instead of a lump sum settlement. As regards the defendant; It is always easier to pay compensation in regular installments than to be forced to pay all at once, especially if the amount is significantly large. The payment plan option also decreases the legal and administrative expenses that the defendant has to pay. This type of agreement is always more attractive to the court also because the time spent on trial is minimized.

The bottom line is simple, compared to a large one-time cash payment; a structured settlement is a good easy-to-use solution for everyone involved. That being said, there are still some situations where a lump sum payment is the best course of action.