Strutured Settlements Are a Good Alternative to Lump Sum Payments for Some New York Personal Injury or Medical Malpractice victims.

money.jpgBeing a New York personal injury lawyer has its perks! A client took me out to dinner the other night. It was a fine meal at a great Geneva New York restaurant, Port’s Café. The restaurant is only about a mile and a half from where my client’s tragedy happened 3 summers ago — his wife was hit and killed by a tractor trailer as she crossed routes 5 and 20 on foot, in a crosswalk, in the City of Geneva.

The dinner was a kind of celebration. We had settled his Geneva New York wrongful death case after almost three years of intense litigation, which included the filing of two lawsuits, and the taking of many depositions. And although no amount of money could ever replace the loving wife he lost, he had finally found peace. He felt that at least a measure of justice had been done. We had made them pay! To him, the money meant they had finally accepted responsibility for the accident after years of denial.

Because the wrongful death settlement was for a substantial sum of money, and my client does not need the money at this time (he has a good job and no children to support), I suggested he should consider a “structured settlement“. A “structured settlement” is an insurance or financial agreement in which the plaintiff does not take the entire settlement from the insurance carrier in “a lump sum payment” right away, but instead forgoes immediate payment of at least some of the money, which he will receive later in “periodic payments” (usually monthly). A structured settlement is usually created through the purchase of an “annuity“, which guaranties future periodic payments at a fixed amount over a fixed period of time, with interest added in so that you end up with more money.

Example: If you “structure” $500,000 to be paid out over a 10 year period, with monthly payments starting in the year 2020 and extending through 2030, you will end up getting paid far more than $500,000, because the money will have earned interest. You might end up with $800,000 or more, depending on the interest rate of the structure.

And you won’t pay a dime of income tax on the money that is earned from the structure until you actual receive the payments. If the client took that same $500,000 as a lump sum, and invested it, he would in most cases have to pay income tax on the money earned from his investments as they are earned. Not so with structured settlements.

When we help a client find the right “structured settlement” for his or her financial needs, we always carefully research structures offered by various insurance carriers and financial institutions to get the client the very best return on his or her money, i.e., the best interest rate, with a secure triple “A” rated institution.

My client was very happy with how I handled his case, and his settlement. That’s why he was taking me out to dinner. He even got a gift for my wife!

Yes — being a New York personal injury and medical malpractice lawyer has its perks — but the best perk of all is a happy client!

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