Malignant Pleural Mesothelioma Survival Rate

Malignant Pleural Mesothelioma Survival Rate is the most common type of malignant mesothelioma. Many factors may be involved in determining the survival rate for this aggressive cancer; some are better understood than others. Estimates of median survival time range from one to two years; survival depends on underlying factors such as the type and extent of spread of the mesothelioma. Only seven percent of people with this cancer survive to five years after diagnosis, but this outlook is gradually improving with some promising experimental treatments. Some people live well beyond five years from the time of diagnosis.

Malignant Pleural Mesothelioma Survival Rate

In general, younger age at diagnosis, absence of weight loss and limited loss of lung function are associated with chances for increased survival. Stage I mesotheliomas, which have not spread to the lymph nodes or adjacent tissues and organs, also carry the best prognosis. The type of cell the cancer is comprised of can also affect survival. The epithelioid cell type has the best prognosis, the mixed or biphasic cell type the next best prognosis, and the sarcomatoid cell type the worst prognosis. The majority of malignant pleural mesotheliomas are of the epithelioid cell type.

Because this cancer takes so long to manifest, people are usually diagnosed at an older age and with more advanced disease, potentially worsening the prognosis and the treatment options available. The more aggressive the treatment, the better the outcome may be, but in cases with cancer that has spread to other parts of the body, chemotherapy may be the only alternative. New drugs, such as the combination of Alimta with Platinol, have been shown to improve survival in malignant mesothelioma patients whose only option is chemotherapy. A number of experimental treatments, such as immunotherapy and biotherapy, are currently being evaluated in clinical trials.

Malignant Pleural Mesothelioma Survival Rate

Malignant Pleural Mesothelioma

Malignant Pleural Mesothelioma is a lethal cancer that starts in the lining of the lungs. The main cause is believed to be unprotected contact with asbestos. Every year about 3000 new cases of this disease are reported in the United States. It is estimated that over the past fifty years nearly eight million people have been exposed to asbestos and that 300,000 new cases would be reported by the year 2030. The peak may be around 2020 and thereafter the incidence is likely to taper down because of the preventive measures that are being taken.

Malignant Pleural Mesothelioma

Like in all cases of cancer, early detection and appropriate treatment improve the survival rate. On both counts the pleural mesothelioma patients are at a disadvantage. Symptoms take anywhere between 20 to 50 years to manifest. Because of this, the patients are generally in the fifty plus age group. And the outwardly noticed indications of the sickness are similar to that of several lesser ailments. This makes the diagnosis difficult. Because of all these, by the time the problem is detected, the cancer is likely to have spread. As yet there is no fully effective line of treatment. It is generally accepted that a combination therapy is better than monotherapy. A great deal of research is being done in this area.

A number of studies have been made about the survival rate among pleural mesothelioma patients. They all come to the same conclusion – the disease is almost always fatal. The lifespan of a person diagnosed with pleural mesothelioma is about six months to two years. There have been exceptions and their stories are inspiring. The life expectancy varies according to the stage (pleural mesothelioma has four different phases) and the type. One research based on the histologic (tissue structure)tests shows a median survival of 11 months – 9.4 months for sarcomatous, 12.5 months for epithelial and 11 months for mixed.

Mesothelioma Survival Rate: Getting This Diagnosis Is Not An Automatic Death Sentence

Mesothelioma Survival Rate

The mesothelioma survival rate for victims is not good. The main reason for this is that it usually goes undetected until the later years of life, even if the asbestos exposure took place in a person’s youth. The earliest symptoms are so common… coughing, fatigue, occasional fever… and come and go, making it easy to assume that you have a cold, the flu, bronchitis, and so forth. By the time it becomes chronic and debilitating enough to diagnose, it is usually to late to do more than make the patient comfortable, or give them a few more months.

Researchers are spending most of their time trying to come up with dependable tests to help diagnose the condition earlier, which would give chemo, radiation, and surgery a better chance of succeeding. Tests like the Mesomark blood test seem to be very promising new treatments that should increase the mesothelioma survival rate.

Mesothelioma Survival Rate

While The Usual Prognosis Is Less Than a Year, Some Patients Do Survive Longer.

A very small number have even achieved a five year remission or longer, though it is always expected that the cancer will return. The professionals cannot really explain why some people are able to fight this dreadful cancer. They do seem to have all gone through some sort of immune system therapy, either through clinical trials or by trying alternative treatments dealing with the immune system. Therefore, researchers are concentrating their efforts on both early detection, and also strengthening the immune system in an attempt to improve the survival rate for mesothelioma patients.

Paul Kraus Is Still Alive 13 Years After Being Diagnosed With Malignant Peritoneal Mesothelioma

You never know what the universe has in store for you. You might want to read about Paul Kraus, an Australian who was diagnosed with malignant peritoneal mesothelioma in 1997, thirty-five years after he was exposed to asbestos while working in a factory. He changed his whole life style by becoming a vegetarian, adding supplements to his diet, juicing, and undergoing ozone therapy, which removes blood from the body, adds ozone to the blood, and then drips it back in.

He is still alive, though getting weaker, and the cancer is not gone, but he is pain free and may live for several more years. He also uses as an example to give cancer patients hope, a 58 year old man who was diagnosed fourteen years ago and had a chest wall resection, and has never had a recurrence of mesothelioma. The mesothelioma survival rate is known to be affected by attitude. A positive attitude and a fighting spirit are needed to fight any chronic disease.

Periodic Settlement

Structured Settlements

A structured settlements pays out money owed from a legal settlement through periodic payments in the form of a financial product known as an annuity. Money from a personal injury or medical malpractice case gets distributed over a longer period to provide for long term needs.

Structured Settlements

Structured Settlements

When those needs change, the contract typically cannot be changed. However, those receiving settlement payments can choose to sell future payments in exchange for a lump sum.

Structured Settlements Explained
Legal language aside, structured settlements are simple. In a civil case, someone is either forced or agrees to pay someone else money to right a wrong. Instead just writing a check, the at-fault person outs the money towards an annuity from a life insurance company. In that annuity contract are details on the series payments the person who was wronged will receive from the life insurance company.

By structuring the money over a longer period of time, a structured settlement offers a better future guarantee of money than a single payout which can be spent quickly.

The process is around 40 years old. In the 1970s, the courts ruled that a medication called Thalidomide given to pregnant women was responsible for serious, lifelong birth defects, structured settlements emerged as a way to make sure the money awarded to the child lasted a lifetime.

Still, today, most settlements from civil cases are lump sums. There are two key differences between lump sum settlements and structured settlements: long term security and taxes. By structuring the money over a longer period of time, a structured settlement offers a better future guarantee of money than a single payout which can be spent quickly. Money you receive from a personal injury is almost always tax free when you receive it. However, once the money is yours, you’re liable for taxes and dividends from the lump sum.

Why People Receive Structured Settlements

STRUCTURED SETTLEMENTS

A structured settlement is a type of annuity that pays out an awards from civil lawsuits.

Personal Injury
A personal injury case is a civil case where someone who’s been harmed files a lawsuit seeking money from the person believed responsible for the harm. Money in the form of a structured settlement helps recipient pay for medical expenses or other costs.

Wrongful Death
A structured settlement is also a common way to compensate the family of someone whose death was the subject of a wrongful death claim. Families may be entitled to receive a stream of tax free payments, to replace the loss of income previously earned by the lost loved one.

Worker’s Compensation
Most people know about workers compensation, which pays out workers who get injured on the job while they recover. Payments can be used for medical treatment and wage replacement during periods when injured employees are unable to work and other expenses.

Structured Settlement Options

Structured settlement recipients have several options to choose from when determining how to receive their award. Structured settlement options include receiving:

  • The entire amount in equal payments over a period of time, also called Time Certain.
  • The entire amount in unequal payments over the period of the Term Certain agreement. For example, the payments may increase or decrease in amount over time.
  • Payments until the recipient dies, also called Life Only.
  • The entire amount in payments until the recipient’s death, at which point a beneficiary will become the new recipient of payments until the term of the agreement has ended.
  • A lump sum payment after the annuity is awarded, or at a later date, such as with a deferred annuity.
  • A lump sum initially for a part of the total amount, followed by recurring payments until the end of the term.
  • Delayed payments that may begin at a certain date or age, such as when the recipient enters retirement.

Pros & Cons to Structured Settlements
Structured settlements are ideally suited for many different types of cases. However, once the terms are in place, they cannot be changed. Because of these inflexible contracts, some recipients choose to sell their payments for a lump-sum payout.

Pros
Structured settlement payments are tax-free.
In the event of the recipient’s premature death, the contract’s designated heir can continue to receive any future guaranteed tax-free payments.

Payments can be scheduled for almost any length of time and can begin immediately or be deferred for as many years as requested. They can include future lump-sum payouts or benefit increases.

Spreading out payments over time can reduce the temptation to make large, extravagant purchases and guarantees future income. This is especially helpful if the recipient has a medical condition that will require long term care.
Unlike stocks, bonds and mutual funds, structured settlements are not dependent on fluctuations of financial markets. Payments are guaranteed by the insurance company that issued the annuity.

A structured settlement often yields, in total, more than a lump-sum payout would because of the interest your annuity may earn over time.

Cons
Once terms are finalized, there’s little you can do to alter them if they do not meet your needs. You cannot renegotiate the terms if your financial situation or the overall economy changes.

Funds are not immediately accessible in case of an emergency, and recipient cannot invest the lump-sum payout in other investments that carry higher rates of return.

Tapping into your structured settlement without selling payments will cost you money. You will pay surrender charges and IRS penalties if you withdraw funds before age 59½.

Some parts of a settlement, such as attorney’s fees and punitive damages can be taxed.

Not all states require insurance companies to disclose their costs to establish a structured settlement or lump-sum annuity. Without this information, a recipient could lose a significant amount of money from their settlement through administrative fees.

Choosing Between Lump Sum and Structured Settlements
Just as there are positives and negatives to electing a structured settlement, there are also pros and cons to electing a lump sum payment. This decision will have long-lasting personal and tax consequences, and should be made under the advisement of a professional such as an accountant or attorney.

When deciding between a lump sum and structured settlement, you should consider factors like:

Tax obligations
Planned large expenses such as mortgage or tuition payments
How risky your spending habits are
Expectations of financial assistance from family or friends
Your financial skills and know-how to manage the full award responsibly

Taxes Decoded: Qualified vs. Unqualified
Structured settlements are often divided into two categories: qualified for tax exemption and unqualified for tax exemption.

Exceptions can exist however, so consult a financial professional when preparing your state and federal taxes.

Qualified Structured Settlements

Qualified
The traditional structured settlement for physical injury or sickness claims must meet certain requirements in order to qualify for tax exemption. These requirements include: the settlement amount has to be placed in an annuity, periodic payments are fixed and determinable as to amount and time of payment, claimant cannot modify the periodic payments, and those payments must be payable to the recipient or liability insurer.

Unqualified
This type of settlement is used when claims for damages fall outside the usual scope of physical injury, sickness or wrongful death and thus are not tax exempt. They are often used for claims involving racial discrimination, sexual harassment, wrongful termination, or violation of the Americans with Disabilities Act of 1990 or the Employee Retirement Income and Securities Act of 1974. The tax benefits differ among the types of transactions.

Qualified Structured Settlements

Structured Settlements and Divorce
When dividing assets in a divorce, structured settlements can subject to being split between the two spouses.
Typically the spouse who doesn’t keep the settlement will get a different asset to balance out the overall division of assets.

How a settlement is handled in a divorce depends on the approach your state takes in asset division. States either divide assets according to community property or by equitable division.

According to community property, anything owned by either spouse before and during the marriage is considered property of the union and can be subject to division. If you live in a state with equitable distribution and you had the settlement before you were married it is likely you will keep the settlement.

In any state, the division of assets doesn’t mean the settlement check itself gets divided. Typically the spouse who doesn’t keep the settlement will get a different asset to balance out the overall division of assets. If you have a settlement and are facing divorce, you may want to hire a lawyer or mediator with experience handling complex assets.

Inheriting a Structured Settlement
The details of your annuity contract should indicate if you are able to designate an heir in the event of your death. The contract should indicate if your payments are are what’s called “guaranteed payments” or if they are “life contingent payments.”

Guaranteed Payments
These are payments which are paid per the contract no matter what. If the person who was awarded the settlement passes away, they can designate an heir to receive those payment instead.

Life Contingent Payments
Considered non-guaranteed, these payments are contingent on the person with the settlement being alive. If the person receiving the payment passes away, the insurance company does not send future payments to an heir.

Rights to Sell Structured Settlements

Structured settlement terms are unable to be renegotiated once the annuity contract has been issued. For some, this means not being able to access their money when they need it.

The structured settlement secondary market emerged because people wanted a way to sell future payments for a lump sum today.

However, for those who have a financial need, there is a way to access their funds by selling payments. The structured settlement secondary market emerged because people wanted a way to sell future payments for a lump sum today. So companies now exist which buy structured settlements in exchange for cash now.

As with any major financial decision, the choice to sell should be something you carefully consider. Federal and state regulations requires the sale of structured settlement payments to go through a judge to ensure it’s in the best interest of the person selling.

Best Structured Settlement Buyers
Selling your structured settlement payments is possible and perfectly legal. Unfortunately unscrupulous companies may try to prey on the financial need of those looking to sell.

Signs of a bad structured settlement buyer:
Misleading behavior, for instance says one thing but puts another thing in writing
Rushes you to sign something you don’t understand
Asking you to lie or misrepresent yourself on a form

Signs of a good structured settlement buyer:

Gives you personalized service with a real person, not an automated telephone system
Takes the time to make sure you understand the selling process
Gives you time to examine the contract
Laws Affecting Structured Settlements

1. Periodic Payment Act
President Ronald Reagan signed the act in 1982, providing the use of structured settlements to seriously injured victims and their families for long-term, tax-free financial security.
2. Federal Protection
Enacted shortly after victims of the 9/11 disaster started receiving financial awards as compensation, it mandated a court appearance when selling structured settlement payments.
3 Legislative Safeguards
Most states have has laws regulating the sale of structured settlement payments. Many ensure sellers receive counseling and instruction before selling their payments.
The Court Process of Structured Settlements
Both the awarding and selling of structured settlements involves a court process.

A: The Defendant uses a structured settlement to give money to the plaintiff while not being liable long term.
B:The defendant works with a qualified assignee to determine the terms of the structured settlements.
C:The qualified assignee works with a life insurance company to purchase an annuity which matches the settlement needs.
D:Then the life insurance company pays the plaintiff a series of payments over time.

  • Selling Structured Settlements Flow Chart
  • Structured Settlement Minors
  • Structured settlements have become popular in accident or personal injury lawsuits involving children.

In the past, many adults acting as parents or guardians of injured children had unlimited discretionary use of a minor’s settlement funds. They spent the money irresponsibly on purchases unrelated to their court-prescribed purposes.

Timed payouts were developed as an alternative to ensure that minors had money for essential long-term necessities, like food, clothing and shelter, and for any continuing medical care.
The process for selling the structured settlements of minors is highly regulated, and these payments are not often approved for transfer.

Because of the danger of parents inappropriately using settlement funds, the process for selling the structured settlements of minors is highly regulated, and these payments are not often approved for transfer.

What Is A Settlement

Structured Settlements

A structured settlements pays out money owed from a legal settlement through periodic payments in the form of a financial product known as an annuity. Money from a personal injury or medical malpractice case gets distributed over a longer period to provide for long term needs.

Structured Settlements

Structured Settlements

When those needs change, the contract typically cannot be changed. However, those receiving settlement payments can choose to sell future payments in exchange for a lump sum.

Structured Settlements Explained
Legal language aside, structured settlements are simple. In a civil case, someone is either forced or agrees to pay someone else money to right a wrong. Instead just writing a check, the at-fault person outs the money towards an annuity from a life insurance company. In that annuity contract are details on the series payments the person who was wronged will receive from the life insurance company.

By structuring the money over a longer period of time, a structured settlement offers a better future guarantee of money than a single payout which can be spent quickly.

The process is around 40 years old. In the 1970s, the courts ruled that a medication called Thalidomide given to pregnant women was responsible for serious, lifelong birth defects, structured settlements emerged as a way to make sure the money awarded to the child lasted a lifetime.

Still, today, most settlements from civil cases are lump sums. There are two key differences between lump sum settlements and structured settlements: long term security and taxes. By structuring the money over a longer period of time, a structured settlement offers a better future guarantee of money than a single payout which can be spent quickly. Money you receive from a personal injury is almost always tax free when you receive it. However, once the money is yours, you’re liable for taxes and dividends from the lump sum.

Why People Receive Structured Settlements

STRUCTURED SETTLEMENTS

A structured settlement is a type of annuity that pays out an awards from civil lawsuits.

Personal Injury
A personal injury case is a civil case where someone who’s been harmed files a lawsuit seeking money from the person believed responsible for the harm. Money in the form of a structured settlement helps recipient pay for medical expenses or other costs.

Wrongful Death
A structured settlement is also a common way to compensate the family of someone whose death was the subject of a wrongful death claim. Families may be entitled to receive a stream of tax free payments, to replace the loss of income previously earned by the lost loved one.

Worker’s Compensation
Most people know about workers compensation, which pays out workers who get injured on the job while they recover. Payments can be used for medical treatment and wage replacement during periods when injured employees are unable to work and other expenses.

Structured Settlement Options

Structured settlement recipients have several options to choose from when determining how to receive their award. Structured settlement options include receiving:

  • The entire amount in equal payments over a period of time, also called Time Certain.
  • The entire amount in unequal payments over the period of the Term Certain agreement. For example, the payments may increase or decrease in amount over time.
  • Payments until the recipient dies, also called Life Only.
  • The entire amount in payments until the recipient’s death, at which point a beneficiary will become the new recipient of payments until the term of the agreement has ended.
  • A lump sum payment after the annuity is awarded, or at a later date, such as with a deferred annuity.
  • A lump sum initially for a part of the total amount, followed by recurring payments until the end of the term.
  • Delayed payments that may begin at a certain date or age, such as when the recipient enters retirement.

Pros & Cons to Structured Settlements
Structured settlements are ideally suited for many different types of cases. However, once the terms are in place, they cannot be changed. Because of these inflexible contracts, some recipients choose to sell their payments for a lump-sum payout.

Pros
Structured settlement payments are tax-free.
In the event of the recipient’s premature death, the contract’s designated heir can continue to receive any future guaranteed tax-free payments.

Payments can be scheduled for almost any length of time and can begin immediately or be deferred for as many years as requested. They can include future lump-sum payouts or benefit increases.

Spreading out payments over time can reduce the temptation to make large, extravagant purchases and guarantees future income. This is especially helpful if the recipient has a medical condition that will require long term care.
Unlike stocks, bonds and mutual funds, structured settlements are not dependent on fluctuations of financial markets. Payments are guaranteed by the insurance company that issued the annuity.

A structured settlement often yields, in total, more than a lump-sum payout would because of the interest your annuity may earn over time.

Cons
Once terms are finalized, there’s little you can do to alter them if they do not meet your needs. You cannot renegotiate the terms if your financial situation or the overall economy changes.

Funds are not immediately accessible in case of an emergency, and recipient cannot invest the lump-sum payout in other investments that carry higher rates of return.

Tapping into your structured settlement without selling payments will cost you money. You will pay surrender charges and IRS penalties if you withdraw funds before age 59½.

Some parts of a settlement, such as attorney’s fees and punitive damages can be taxed.

Not all states require insurance companies to disclose their costs to establish a structured settlement or lump-sum annuity. Without this information, a recipient could lose a significant amount of money from their settlement through administrative fees.

Choosing Between Lump Sum and Structured Settlements
Just as there are positives and negatives to electing a structured settlement, there are also pros and cons to electing a lump sum payment. This decision will have long-lasting personal and tax consequences, and should be made under the advisement of a professional such as an accountant or attorney.

When deciding between a lump sum and structured settlement, you should consider factors like:

Tax obligations
Planned large expenses such as mortgage or tuition payments
How risky your spending habits are
Expectations of financial assistance from family or friends
Your financial skills and know-how to manage the full award responsibly

Taxes Decoded: Qualified vs. Unqualified
Structured settlements are often divided into two categories: qualified for tax exemption and unqualified for tax exemption.

Exceptions can exist however, so consult a financial professional when preparing your state and federal taxes.

Qualified Structured Settlements

Qualified
The traditional structured settlement for physical injury or sickness claims must meet certain requirements in order to qualify for tax exemption. These requirements include: the settlement amount has to be placed in an annuity, periodic payments are fixed and determinable as to amount and time of payment, claimant cannot modify the periodic payments, and those payments must be payable to the recipient or liability insurer.

Unqualified
This type of settlement is used when claims for damages fall outside the usual scope of physical injury, sickness or wrongful death and thus are not tax exempt. They are often used for claims involving racial discrimination, sexual harassment, wrongful termination, or violation of the Americans with Disabilities Act of 1990 or the Employee Retirement Income and Securities Act of 1974. The tax benefits differ among the types of transactions.

Qualified Structured Settlements

Structured Settlements and Divorce
When dividing assets in a divorce, structured settlements can subject to being split between the two spouses.
Typically the spouse who doesn’t keep the settlement will get a different asset to balance out the overall division of assets.

How a settlement is handled in a divorce depends on the approach your state takes in asset division. States either divide assets according to community property or by equitable division.

According to community property, anything owned by either spouse before and during the marriage is considered property of the union and can be subject to division. If you live in a state with equitable distribution and you had the settlement before you were married it is likely you will keep the settlement.

In any state, the division of assets doesn’t mean the settlement check itself gets divided. Typically the spouse who doesn’t keep the settlement will get a different asset to balance out the overall division of assets. If you have a settlement and are facing divorce, you may want to hire a lawyer or mediator with experience handling complex assets.

Inheriting a Structured Settlement
The details of your annuity contract should indicate if you are able to designate an heir in the event of your death. The contract should indicate if your payments are are what’s called “guaranteed payments” or if they are “life contingent payments.”

Guaranteed Payments
These are payments which are paid per the contract no matter what. If the person who was awarded the settlement passes away, they can designate an heir to receive those payment instead.

Life Contingent Payments
Considered non-guaranteed, these payments are contingent on the person with the settlement being alive. If the person receiving the payment passes away, the insurance company does not send future payments to an heir.

Rights to Sell Structured Settlements

Structured settlement terms are unable to be renegotiated once the annuity contract has been issued. For some, this means not being able to access their money when they need it.

The structured settlement secondary market emerged because people wanted a way to sell future payments for a lump sum today.

However, for those who have a financial need, there is a way to access their funds by selling payments. The structured settlement secondary market emerged because people wanted a way to sell future payments for a lump sum today. So companies now exist which buy structured settlements in exchange for cash now.

As with any major financial decision, the choice to sell should be something you carefully consider. Federal and state regulations requires the sale of structured settlement payments to go through a judge to ensure it’s in the best interest of the person selling.

Best Structured Settlement Buyers
Selling your structured settlement payments is possible and perfectly legal. Unfortunately unscrupulous companies may try to prey on the financial need of those looking to sell.

Signs of a bad structured settlement buyer:
Misleading behavior, for instance says one thing but puts another thing in writing
Rushes you to sign something you don’t understand
Asking you to lie or misrepresent yourself on a form

Signs of a good structured settlement buyer:

Gives you personalized service with a real person, not an automated telephone system
Takes the time to make sure you understand the selling process
Gives you time to examine the contract
Laws Affecting Structured Settlements

1. Periodic Payment Act
President Ronald Reagan signed the act in 1982, providing the use of structured settlements to seriously injured victims and their families for long-term, tax-free financial security.
2. Federal Protection
Enacted shortly after victims of the 9/11 disaster started receiving financial awards as compensation, it mandated a court appearance when selling structured settlement payments.
3 Legislative Safeguards
Most states have has laws regulating the sale of structured settlement payments. Many ensure sellers receive counseling and instruction before selling their payments.
The Court Process of Structured Settlements
Both the awarding and selling of structured settlements involves a court process.

A: The Defendant uses a structured settlement to give money to the plaintiff while not being liable long term.
B:The defendant works with a qualified assignee to determine the terms of the structured settlements.
C:The qualified assignee works with a life insurance company to purchase an annuity which matches the settlement needs.
D:Then the life insurance company pays the plaintiff a series of payments over time.

  • Selling Structured Settlements Flow Chart
  • Structured Settlement Minors
  • Structured settlements have become popular in accident or personal injury lawsuits involving children.

In the past, many adults acting as parents or guardians of injured children had unlimited discretionary use of a minor’s settlement funds. They spent the money irresponsibly on purchases unrelated to their court-prescribed purposes.

Timed payouts were developed as an alternative to ensure that minors had money for essential long-term necessities, like food, clothing and shelter, and for any continuing medical care.
The process for selling the structured settlements of minors is highly regulated, and these payments are not often approved for transfer.

Because of the danger of parents inappropriately using settlement funds, the process for selling the structured settlements of minors is highly regulated, and these payments are not often approved for transfer.

Settlement Protection

Structured Settlements

A structured settlements pays out money owed from a legal settlement through periodic payments in the form of a financial product known as an annuity. Money from a personal injury or medical malpractice case gets distributed over a longer period to provide for long term needs.

Structured Settlements

Structured Settlements

When those needs change, the contract typically cannot be changed. However, those receiving settlement payments can choose to sell future payments in exchange for a lump sum.

Structured Settlements Explained
Legal language aside, structured settlements are simple. In a civil case, someone is either forced or agrees to pay someone else money to right a wrong. Instead just writing a check, the at-fault person outs the money towards an annuity from a life insurance company. In that annuity contract are details on the series payments the person who was wronged will receive from the life insurance company.

By structuring the money over a longer period of time, a structured settlement offers a better future guarantee of money than a single payout which can be spent quickly.

The process is around 40 years old. In the 1970s, the courts ruled that a medication called Thalidomide given to pregnant women was responsible for serious, lifelong birth defects, structured settlements emerged as a way to make sure the money awarded to the child lasted a lifetime.

Still, today, most settlements from civil cases are lump sums. There are two key differences between lump sum settlements and structured settlements: long term security and taxes. By structuring the money over a longer period of time, a structured settlement offers a better future guarantee of money than a single payout which can be spent quickly. Money you receive from a personal injury is almost always tax free when you receive it. However, once the money is yours, you’re liable for taxes and dividends from the lump sum.

Why People Receive Structured Settlements

STRUCTURED SETTLEMENTS

A structured settlement is a type of annuity that pays out an awards from civil lawsuits.

Personal Injury
A personal injury case is a civil case where someone who’s been harmed files a lawsuit seeking money from the person believed responsible for the harm. Money in the form of a structured settlement helps recipient pay for medical expenses or other costs.

Wrongful Death
A structured settlement is also a common way to compensate the family of someone whose death was the subject of a wrongful death claim. Families may be entitled to receive a stream of tax free payments, to replace the loss of income previously earned by the lost loved one.

Worker’s Compensation
Most people know about workers compensation, which pays out workers who get injured on the job while they recover. Payments can be used for medical treatment and wage replacement during periods when injured employees are unable to work and other expenses.

Structured Settlement Options

Structured settlement recipients have several options to choose from when determining how to receive their award. Structured settlement options include receiving:

  • The entire amount in equal payments over a period of time, also called Time Certain.
  • The entire amount in unequal payments over the period of the Term Certain agreement. For example, the payments may increase or decrease in amount over time.
  • Payments until the recipient dies, also called Life Only.
  • The entire amount in payments until the recipient’s death, at which point a beneficiary will become the new recipient of payments until the term of the agreement has ended.
  • A lump sum payment after the annuity is awarded, or at a later date, such as with a deferred annuity.
  • A lump sum initially for a part of the total amount, followed by recurring payments until the end of the term.
  • Delayed payments that may begin at a certain date or age, such as when the recipient enters retirement.

Pros & Cons to Structured Settlements
Structured settlements are ideally suited for many different types of cases. However, once the terms are in place, they cannot be changed. Because of these inflexible contracts, some recipients choose to sell their payments for a lump-sum payout.

Pros
Structured settlement payments are tax-free.
In the event of the recipient’s premature death, the contract’s designated heir can continue to receive any future guaranteed tax-free payments.

Payments can be scheduled for almost any length of time and can begin immediately or be deferred for as many years as requested. They can include future lump-sum payouts or benefit increases.

Spreading out payments over time can reduce the temptation to make large, extravagant purchases and guarantees future income. This is especially helpful if the recipient has a medical condition that will require long term care.
Unlike stocks, bonds and mutual funds, structured settlements are not dependent on fluctuations of financial markets. Payments are guaranteed by the insurance company that issued the annuity.

A structured settlement often yields, in total, more than a lump-sum payout would because of the interest your annuity may earn over time.

Cons
Once terms are finalized, there’s little you can do to alter them if they do not meet your needs. You cannot renegotiate the terms if your financial situation or the overall economy changes.

Funds are not immediately accessible in case of an emergency, and recipient cannot invest the lump-sum payout in other investments that carry higher rates of return.

Tapping into your structured settlement without selling payments will cost you money. You will pay surrender charges and IRS penalties if you withdraw funds before age 59½.

Some parts of a settlement, such as attorney’s fees and punitive damages can be taxed.

Not all states require insurance companies to disclose their costs to establish a structured settlement or lump-sum annuity. Without this information, a recipient could lose a significant amount of money from their settlement through administrative fees.

Choosing Between Lump Sum and Structured Settlements
Just as there are positives and negatives to electing a structured settlement, there are also pros and cons to electing a lump sum payment. This decision will have long-lasting personal and tax consequences, and should be made under the advisement of a professional such as an accountant or attorney.

When deciding between a lump sum and structured settlement, you should consider factors like:

Tax obligations
Planned large expenses such as mortgage or tuition payments
How risky your spending habits are
Expectations of financial assistance from family or friends
Your financial skills and know-how to manage the full award responsibly

Taxes Decoded: Qualified vs. Unqualified
Structured settlements are often divided into two categories: qualified for tax exemption and unqualified for tax exemption.

Exceptions can exist however, so consult a financial professional when preparing your state and federal taxes.

Qualified Structured Settlements

Qualified
The traditional structured settlement for physical injury or sickness claims must meet certain requirements in order to qualify for tax exemption. These requirements include: the settlement amount has to be placed in an annuity, periodic payments are fixed and determinable as to amount and time of payment, claimant cannot modify the periodic payments, and those payments must be payable to the recipient or liability insurer.

Unqualified
This type of settlement is used when claims for damages fall outside the usual scope of physical injury, sickness or wrongful death and thus are not tax exempt. They are often used for claims involving racial discrimination, sexual harassment, wrongful termination, or violation of the Americans with Disabilities Act of 1990 or the Employee Retirement Income and Securities Act of 1974. The tax benefits differ among the types of transactions.

Qualified Structured Settlements

Structured Settlements and Divorce
When dividing assets in a divorce, structured settlements can subject to being split between the two spouses.
Typically the spouse who doesn’t keep the settlement will get a different asset to balance out the overall division of assets.

How a settlement is handled in a divorce depends on the approach your state takes in asset division. States either divide assets according to community property or by equitable division.

According to community property, anything owned by either spouse before and during the marriage is considered property of the union and can be subject to division. If you live in a state with equitable distribution and you had the settlement before you were married it is likely you will keep the settlement.

In any state, the division of assets doesn’t mean the settlement check itself gets divided. Typically the spouse who doesn’t keep the settlement will get a different asset to balance out the overall division of assets. If you have a settlement and are facing divorce, you may want to hire a lawyer or mediator with experience handling complex assets.

Inheriting a Structured Settlement
The details of your annuity contract should indicate if you are able to designate an heir in the event of your death. The contract should indicate if your payments are are what’s called “guaranteed payments” or if they are “life contingent payments.”

Guaranteed Payments
These are payments which are paid per the contract no matter what. If the person who was awarded the settlement passes away, they can designate an heir to receive those payment instead.

Life Contingent Payments
Considered non-guaranteed, these payments are contingent on the person with the settlement being alive. If the person receiving the payment passes away, the insurance company does not send future payments to an heir.

Rights to Sell Structured Settlements

Structured settlement terms are unable to be renegotiated once the annuity contract has been issued. For some, this means not being able to access their money when they need it.

The structured settlement secondary market emerged because people wanted a way to sell future payments for a lump sum today.

However, for those who have a financial need, there is a way to access their funds by selling payments. The structured settlement secondary market emerged because people wanted a way to sell future payments for a lump sum today. So companies now exist which buy structured settlements in exchange for cash now.

As with any major financial decision, the choice to sell should be something you carefully consider. Federal and state regulations requires the sale of structured settlement payments to go through a judge to ensure it’s in the best interest of the person selling.

Best Structured Settlement Buyers
Selling your structured settlement payments is possible and perfectly legal. Unfortunately unscrupulous companies may try to prey on the financial need of those looking to sell.

Signs of a bad structured settlement buyer:
Misleading behavior, for instance says one thing but puts another thing in writing
Rushes you to sign something you don’t understand
Asking you to lie or misrepresent yourself on a form

Signs of a good structured settlement buyer:

Gives you personalized service with a real person, not an automated telephone system
Takes the time to make sure you understand the selling process
Gives you time to examine the contract
Laws Affecting Structured Settlements

1. Periodic Payment Act
President Ronald Reagan signed the act in 1982, providing the use of structured settlements to seriously injured victims and their families for long-term, tax-free financial security.
2. Federal Protection
Enacted shortly after victims of the 9/11 disaster started receiving financial awards as compensation, it mandated a court appearance when selling structured settlement payments.
3 Legislative Safeguards
Most states have has laws regulating the sale of structured settlement payments. Many ensure sellers receive counseling and instruction before selling their payments.
The Court Process of Structured Settlements
Both the awarding and selling of structured settlements involves a court process.

A: The Defendant uses a structured settlement to give money to the plaintiff while not being liable long term.
B:The defendant works with a qualified assignee to determine the terms of the structured settlements.
C:The qualified assignee works with a life insurance company to purchase an annuity which matches the settlement needs.
D:Then the life insurance company pays the plaintiff a series of payments over time.

  • Selling Structured Settlements Flow Chart
  • Structured Settlement Minors
  • Structured settlements have become popular in accident or personal injury lawsuits involving children.

In the past, many adults acting as parents or guardians of injured children had unlimited discretionary use of a minor’s settlement funds. They spent the money irresponsibly on purchases unrelated to their court-prescribed purposes.

Timed payouts were developed as an alternative to ensure that minors had money for essential long-term necessities, like food, clothing and shelter, and for any continuing medical care.
The process for selling the structured settlements of minors is highly regulated, and these payments are not often approved for transfer.

Because of the danger of parents inappropriately using settlement funds, the process for selling the structured settlements of minors is highly regulated, and these payments are not often approved for transfer.

Tax Free Settlement Payments

Structured Settlements

A structured settlements pays out money owed from a legal settlement through periodic payments in the form of a financial product known as an annuity. Money from a personal injury or medical malpractice case gets distributed over a longer period to provide for long term needs.

Structured Settlements

Structured Settlements

When those needs change, the contract typically cannot be changed. However, those receiving settlement payments can choose to sell future payments in exchange for a lump sum.

Structured Settlements Explained
Legal language aside, structured settlements are simple. In a civil case, someone is either forced or agrees to pay someone else money to right a wrong. Instead just writing a check, the at-fault person outs the money towards an annuity from a life insurance company. In that annuity contract are details on the series payments the person who was wronged will receive from the life insurance company.

By structuring the money over a longer period of time, a structured settlement offers a better future guarantee of money than a single payout which can be spent quickly.

The process is around 40 years old. In the 1970s, the courts ruled that a medication called Thalidomide given to pregnant women was responsible for serious, lifelong birth defects, structured settlements emerged as a way to make sure the money awarded to the child lasted a lifetime.

Still, today, most settlements from civil cases are lump sums. There are two key differences between lump sum settlements and structured settlements: long term security and taxes. By structuring the money over a longer period of time, a structured settlement offers a better future guarantee of money than a single payout which can be spent quickly. Money you receive from a personal injury is almost always tax free when you receive it. However, once the money is yours, you’re liable for taxes and dividends from the lump sum.

Why People Receive Structured Settlements

STRUCTURED SETTLEMENTS

A structured settlement is a type of annuity that pays out an awards from civil lawsuits.

Personal Injury
A personal injury case is a civil case where someone who’s been harmed files a lawsuit seeking money from the person believed responsible for the harm. Money in the form of a structured settlement helps recipient pay for medical expenses or other costs.

Wrongful Death
A structured settlement is also a common way to compensate the family of someone whose death was the subject of a wrongful death claim. Families may be entitled to receive a stream of tax free payments, to replace the loss of income previously earned by the lost loved one.

Worker’s Compensation
Most people know about workers compensation, which pays out workers who get injured on the job while they recover. Payments can be used for medical treatment and wage replacement during periods when injured employees are unable to work and other expenses.

Structured Settlement Options

Structured settlement recipients have several options to choose from when determining how to receive their award. Structured settlement options include receiving:

  • The entire amount in equal payments over a period of time, also called Time Certain.
  • The entire amount in unequal payments over the period of the Term Certain agreement. For example, the payments may increase or decrease in amount over time.
  • Payments until the recipient dies, also called Life Only.
  • The entire amount in payments until the recipient’s death, at which point a beneficiary will become the new recipient of payments until the term of the agreement has ended.
  • A lump sum payment after the annuity is awarded, or at a later date, such as with a deferred annuity.
  • A lump sum initially for a part of the total amount, followed by recurring payments until the end of the term.
  • Delayed payments that may begin at a certain date or age, such as when the recipient enters retirement.

Pros & Cons to Structured Settlements
Structured settlements are ideally suited for many different types of cases. However, once the terms are in place, they cannot be changed. Because of these inflexible contracts, some recipients choose to sell their payments for a lump-sum payout.

Pros
Structured settlement payments are tax-free.
In the event of the recipient’s premature death, the contract’s designated heir can continue to receive any future guaranteed tax-free payments.

Payments can be scheduled for almost any length of time and can begin immediately or be deferred for as many years as requested. They can include future lump-sum payouts or benefit increases.

Spreading out payments over time can reduce the temptation to make large, extravagant purchases and guarantees future income. This is especially helpful if the recipient has a medical condition that will require long term care.
Unlike stocks, bonds and mutual funds, structured settlements are not dependent on fluctuations of financial markets. Payments are guaranteed by the insurance company that issued the annuity.

A structured settlement often yields, in total, more than a lump-sum payout would because of the interest your annuity may earn over time.

Cons
Once terms are finalized, there’s little you can do to alter them if they do not meet your needs. You cannot renegotiate the terms if your financial situation or the overall economy changes.

Funds are not immediately accessible in case of an emergency, and recipient cannot invest the lump-sum payout in other investments that carry higher rates of return.

Tapping into your structured settlement without selling payments will cost you money. You will pay surrender charges and IRS penalties if you withdraw funds before age 59½.

Some parts of a settlement, such as attorney’s fees and punitive damages can be taxed.

Not all states require insurance companies to disclose their costs to establish a structured settlement or lump-sum annuity. Without this information, a recipient could lose a significant amount of money from their settlement through administrative fees.

Choosing Between Lump Sum and Structured Settlements
Just as there are positives and negatives to electing a structured settlement, there are also pros and cons to electing a lump sum payment. This decision will have long-lasting personal and tax consequences, and should be made under the advisement of a professional such as an accountant or attorney.

When deciding between a lump sum and structured settlement, you should consider factors like:

Tax obligations
Planned large expenses such as mortgage or tuition payments
How risky your spending habits are
Expectations of financial assistance from family or friends
Your financial skills and know-how to manage the full award responsibly

Taxes Decoded: Qualified vs. Unqualified
Structured settlements are often divided into two categories: qualified for tax exemption and unqualified for tax exemption.

Exceptions can exist however, so consult a financial professional when preparing your state and federal taxes.

Qualified Structured Settlements

Qualified
The traditional structured settlement for physical injury or sickness claims must meet certain requirements in order to qualify for tax exemption. These requirements include: the settlement amount has to be placed in an annuity, periodic payments are fixed and determinable as to amount and time of payment, claimant cannot modify the periodic payments, and those payments must be payable to the recipient or liability insurer.

Unqualified
This type of settlement is used when claims for damages fall outside the usual scope of physical injury, sickness or wrongful death and thus are not tax exempt. They are often used for claims involving racial discrimination, sexual harassment, wrongful termination, or violation of the Americans with Disabilities Act of 1990 or the Employee Retirement Income and Securities Act of 1974. The tax benefits differ among the types of transactions.

Qualified Structured Settlements

Structured Settlements and Divorce
When dividing assets in a divorce, structured settlements can subject to being split between the two spouses.
Typically the spouse who doesn’t keep the settlement will get a different asset to balance out the overall division of assets.

How a settlement is handled in a divorce depends on the approach your state takes in asset division. States either divide assets according to community property or by equitable division.

According to community property, anything owned by either spouse before and during the marriage is considered property of the union and can be subject to division. If you live in a state with equitable distribution and you had the settlement before you were married it is likely you will keep the settlement.

In any state, the division of assets doesn’t mean the settlement check itself gets divided. Typically the spouse who doesn’t keep the settlement will get a different asset to balance out the overall division of assets. If you have a settlement and are facing divorce, you may want to hire a lawyer or mediator with experience handling complex assets.

Inheriting a Structured Settlement
The details of your annuity contract should indicate if you are able to designate an heir in the event of your death. The contract should indicate if your payments are are what’s called “guaranteed payments” or if they are “life contingent payments.”

Guaranteed Payments
These are payments which are paid per the contract no matter what. If the person who was awarded the settlement passes away, they can designate an heir to receive those payment instead.

Life Contingent Payments
Considered non-guaranteed, these payments are contingent on the person with the settlement being alive. If the person receiving the payment passes away, the insurance company does not send future payments to an heir.

Rights to Sell Structured Settlements

Structured settlement terms are unable to be renegotiated once the annuity contract has been issued. For some, this means not being able to access their money when they need it.

The structured settlement secondary market emerged because people wanted a way to sell future payments for a lump sum today.

However, for those who have a financial need, there is a way to access their funds by selling payments. The structured settlement secondary market emerged because people wanted a way to sell future payments for a lump sum today. So companies now exist which buy structured settlements in exchange for cash now.

As with any major financial decision, the choice to sell should be something you carefully consider. Federal and state regulations requires the sale of structured settlement payments to go through a judge to ensure it’s in the best interest of the person selling.

Best Structured Settlement Buyers
Selling your structured settlement payments is possible and perfectly legal. Unfortunately unscrupulous companies may try to prey on the financial need of those looking to sell.

Signs of a bad structured settlement buyer:
Misleading behavior, for instance says one thing but puts another thing in writing
Rushes you to sign something you don’t understand
Asking you to lie or misrepresent yourself on a form

Signs of a good structured settlement buyer:

Gives you personalized service with a real person, not an automated telephone system
Takes the time to make sure you understand the selling process
Gives you time to examine the contract
Laws Affecting Structured Settlements

1. Periodic Payment Act
President Ronald Reagan signed the act in 1982, providing the use of structured settlements to seriously injured victims and their families for long-term, tax-free financial security.
2. Federal Protection
Enacted shortly after victims of the 9/11 disaster started receiving financial awards as compensation, it mandated a court appearance when selling structured settlement payments.
3 Legislative Safeguards
Most states have has laws regulating the sale of structured settlement payments. Many ensure sellers receive counseling and instruction before selling their payments.
The Court Process of Structured Settlements
Both the awarding and selling of structured settlements involves a court process.

A: The Defendant uses a structured settlement to give money to the plaintiff while not being liable long term.
B:The defendant works with a qualified assignee to determine the terms of the structured settlements.
C:The qualified assignee works with a life insurance company to purchase an annuity which matches the settlement needs.
D:Then the life insurance company pays the plaintiff a series of payments over time.

  • Selling Structured Settlements Flow Chart
  • Structured Settlement Minors
  • Structured settlements have become popular in accident or personal injury lawsuits involving children.

In the past, many adults acting as parents or guardians of injured children had unlimited discretionary use of a minor’s settlement funds. They spent the money irresponsibly on purchases unrelated to their court-prescribed purposes.

Timed payouts were developed as an alternative to ensure that minors had money for essential long-term necessities, like food, clothing and shelter, and for any continuing medical care.
The process for selling the structured settlements of minors is highly regulated, and these payments are not often approved for transfer.

Because of the danger of parents inappropriately using settlement funds, the process for selling the structured settlements of minors is highly regulated, and these payments are not often approved for transfer.

What Is The Lump Sum

Structured Settlements

A structured settlements pays out money owed from a legal settlement through periodic payments in the form of a financial product known as an annuity. Money from a personal injury or medical malpractice case gets distributed over a longer period to provide for long term needs.

Structured Settlements

Structured Settlements

When those needs change, the contract typically cannot be changed. However, those receiving settlement payments can choose to sell future payments in exchange for a lump sum.

Structured Settlements Explained
Legal language aside, structured settlements are simple. In a civil case, someone is either forced or agrees to pay someone else money to right a wrong. Instead just writing a check, the at-fault person outs the money towards an annuity from a life insurance company. In that annuity contract are details on the series payments the person who was wronged will receive from the life insurance company.

By structuring the money over a longer period of time, a structured settlement offers a better future guarantee of money than a single payout which can be spent quickly.

The process is around 40 years old. In the 1970s, the courts ruled that a medication called Thalidomide given to pregnant women was responsible for serious, lifelong birth defects, structured settlements emerged as a way to make sure the money awarded to the child lasted a lifetime.

Still, today, most settlements from civil cases are lump sums. There are two key differences between lump sum settlements and structured settlements: long term security and taxes. By structuring the money over a longer period of time, a structured settlement offers a better future guarantee of money than a single payout which can be spent quickly. Money you receive from a personal injury is almost always tax free when you receive it. However, once the money is yours, you’re liable for taxes and dividends from the lump sum.

Why People Receive Structured Settlements

STRUCTURED SETTLEMENTS

A structured settlement is a type of annuity that pays out an awards from civil lawsuits.

Personal Injury
A personal injury case is a civil case where someone who’s been harmed files a lawsuit seeking money from the person believed responsible for the harm. Money in the form of a structured settlement helps recipient pay for medical expenses or other costs.

Wrongful Death
A structured settlement is also a common way to compensate the family of someone whose death was the subject of a wrongful death claim. Families may be entitled to receive a stream of tax free payments, to replace the loss of income previously earned by the lost loved one.

Worker’s Compensation
Most people know about workers compensation, which pays out workers who get injured on the job while they recover. Payments can be used for medical treatment and wage replacement during periods when injured employees are unable to work and other expenses.

Structured Settlement Options

Structured settlement recipients have several options to choose from when determining how to receive their award. Structured settlement options include receiving:

  • The entire amount in equal payments over a period of time, also called Time Certain.
  • The entire amount in unequal payments over the period of the Term Certain agreement. For example, the payments may increase or decrease in amount over time.
  • Payments until the recipient dies, also called Life Only.
  • The entire amount in payments until the recipient’s death, at which point a beneficiary will become the new recipient of payments until the term of the agreement has ended.
  • A lump sum payment after the annuity is awarded, or at a later date, such as with a deferred annuity.
  • A lump sum initially for a part of the total amount, followed by recurring payments until the end of the term.
  • Delayed payments that may begin at a certain date or age, such as when the recipient enters retirement.

Pros & Cons to Structured Settlements
Structured settlements are ideally suited for many different types of cases. However, once the terms are in place, they cannot be changed. Because of these inflexible contracts, some recipients choose to sell their payments for a lump-sum payout.

Pros
Structured settlement payments are tax-free.
In the event of the recipient’s premature death, the contract’s designated heir can continue to receive any future guaranteed tax-free payments.

Payments can be scheduled for almost any length of time and can begin immediately or be deferred for as many years as requested. They can include future lump-sum payouts or benefit increases.

Spreading out payments over time can reduce the temptation to make large, extravagant purchases and guarantees future income. This is especially helpful if the recipient has a medical condition that will require long term care.
Unlike stocks, bonds and mutual funds, structured settlements are not dependent on fluctuations of financial markets. Payments are guaranteed by the insurance company that issued the annuity.

A structured settlement often yields, in total, more than a lump-sum payout would because of the interest your annuity may earn over time.

Cons
Once terms are finalized, there’s little you can do to alter them if they do not meet your needs. You cannot renegotiate the terms if your financial situation or the overall economy changes.

Funds are not immediately accessible in case of an emergency, and recipient cannot invest the lump-sum payout in other investments that carry higher rates of return.

Tapping into your structured settlement without selling payments will cost you money. You will pay surrender charges and IRS penalties if you withdraw funds before age 59½.

Some parts of a settlement, such as attorney’s fees and punitive damages can be taxed.

Not all states require insurance companies to disclose their costs to establish a structured settlement or lump-sum annuity. Without this information, a recipient could lose a significant amount of money from their settlement through administrative fees.

Choosing Between Lump Sum and Structured Settlements
Just as there are positives and negatives to electing a structured settlement, there are also pros and cons to electing a lump sum payment. This decision will have long-lasting personal and tax consequences, and should be made under the advisement of a professional such as an accountant or attorney.

When deciding between a lump sum and structured settlement, you should consider factors like:

Tax obligations
Planned large expenses such as mortgage or tuition payments
How risky your spending habits are
Expectations of financial assistance from family or friends
Your financial skills and know-how to manage the full award responsibly

Taxes Decoded: Qualified vs. Unqualified
Structured settlements are often divided into two categories: qualified for tax exemption and unqualified for tax exemption.

Exceptions can exist however, so consult a financial professional when preparing your state and federal taxes.

Qualified Structured Settlements

Qualified
The traditional structured settlement for physical injury or sickness claims must meet certain requirements in order to qualify for tax exemption. These requirements include: the settlement amount has to be placed in an annuity, periodic payments are fixed and determinable as to amount and time of payment, claimant cannot modify the periodic payments, and those payments must be payable to the recipient or liability insurer.

Unqualified
This type of settlement is used when claims for damages fall outside the usual scope of physical injury, sickness or wrongful death and thus are not tax exempt. They are often used for claims involving racial discrimination, sexual harassment, wrongful termination, or violation of the Americans with Disabilities Act of 1990 or the Employee Retirement Income and Securities Act of 1974. The tax benefits differ among the types of transactions.

Qualified Structured Settlements

Structured Settlements and Divorce
When dividing assets in a divorce, structured settlements can subject to being split between the two spouses.
Typically the spouse who doesn’t keep the settlement will get a different asset to balance out the overall division of assets.

How a settlement is handled in a divorce depends on the approach your state takes in asset division. States either divide assets according to community property or by equitable division.

According to community property, anything owned by either spouse before and during the marriage is considered property of the union and can be subject to division. If you live in a state with equitable distribution and you had the settlement before you were married it is likely you will keep the settlement.

In any state, the division of assets doesn’t mean the settlement check itself gets divided. Typically the spouse who doesn’t keep the settlement will get a different asset to balance out the overall division of assets. If you have a settlement and are facing divorce, you may want to hire a lawyer or mediator with experience handling complex assets.

Inheriting a Structured Settlement
The details of your annuity contract should indicate if you are able to designate an heir in the event of your death. The contract should indicate if your payments are are what’s called “guaranteed payments” or if they are “life contingent payments.”

Guaranteed Payments
These are payments which are paid per the contract no matter what. If the person who was awarded the settlement passes away, they can designate an heir to receive those payment instead.

Life Contingent Payments
Considered non-guaranteed, these payments are contingent on the person with the settlement being alive. If the person receiving the payment passes away, the insurance company does not send future payments to an heir.

Rights to Sell Structured Settlements

Structured settlement terms are unable to be renegotiated once the annuity contract has been issued. For some, this means not being able to access their money when they need it.

The structured settlement secondary market emerged because people wanted a way to sell future payments for a lump sum today.

However, for those who have a financial need, there is a way to access their funds by selling payments. The structured settlement secondary market emerged because people wanted a way to sell future payments for a lump sum today. So companies now exist which buy structured settlements in exchange for cash now.

As with any major financial decision, the choice to sell should be something you carefully consider. Federal and state regulations requires the sale of structured settlement payments to go through a judge to ensure it’s in the best interest of the person selling.

Best Structured Settlement Buyers
Selling your structured settlement payments is possible and perfectly legal. Unfortunately unscrupulous companies may try to prey on the financial need of those looking to sell.

Signs of a bad structured settlement buyer:
Misleading behavior, for instance says one thing but puts another thing in writing
Rushes you to sign something you don’t understand
Asking you to lie or misrepresent yourself on a form

Signs of a good structured settlement buyer:

Gives you personalized service with a real person, not an automated telephone system
Takes the time to make sure you understand the selling process
Gives you time to examine the contract
Laws Affecting Structured Settlements

1. Periodic Payment Act
President Ronald Reagan signed the act in 1982, providing the use of structured settlements to seriously injured victims and their families for long-term, tax-free financial security.
2. Federal Protection
Enacted shortly after victims of the 9/11 disaster started receiving financial awards as compensation, it mandated a court appearance when selling structured settlement payments.
3 Legislative Safeguards
Most states have has laws regulating the sale of structured settlement payments. Many ensure sellers receive counseling and instruction before selling their payments.
The Court Process of Structured Settlements
Both the awarding and selling of structured settlements involves a court process.

A: The Defendant uses a structured settlement to give money to the plaintiff while not being liable long term.
B:The defendant works with a qualified assignee to determine the terms of the structured settlements.
C:The qualified assignee works with a life insurance company to purchase an annuity which matches the settlement needs.
D:Then the life insurance company pays the plaintiff a series of payments over time.

  • Selling Structured Settlements Flow Chart
  • Structured Settlement Minors
  • Structured settlements have become popular in accident or personal injury lawsuits involving children.

In the past, many adults acting as parents or guardians of injured children had unlimited discretionary use of a minor’s settlement funds. They spent the money irresponsibly on purchases unrelated to their court-prescribed purposes.

Timed payouts were developed as an alternative to ensure that minors had money for essential long-term necessities, like food, clothing and shelter, and for any continuing medical care.
The process for selling the structured settlements of minors is highly regulated, and these payments are not often approved for transfer.

Because of the danger of parents inappropriately using settlement funds, the process for selling the structured settlements of minors is highly regulated, and these payments are not often approved for transfer.

Irc 130

Structured Settlements

A structured settlements pays out money owed from a legal settlement through periodic payments in the form of a financial product known as an annuity. Money from a personal injury or medical malpractice case gets distributed over a longer period to provide for long term needs.

Structured Settlements

Structured Settlements

When those needs change, the contract typically cannot be changed. However, those receiving settlement payments can choose to sell future payments in exchange for a lump sum.

Structured Settlements Explained
Legal language aside, structured settlements are simple. In a civil case, someone is either forced or agrees to pay someone else money to right a wrong. Instead just writing a check, the at-fault person outs the money towards an annuity from a life insurance company. In that annuity contract are details on the series payments the person who was wronged will receive from the life insurance company.

By structuring the money over a longer period of time, a structured settlement offers a better future guarantee of money than a single payout which can be spent quickly.

The process is around 40 years old. In the 1970s, the courts ruled that a medication called Thalidomide given to pregnant women was responsible for serious, lifelong birth defects, structured settlements emerged as a way to make sure the money awarded to the child lasted a lifetime.

Still, today, most settlements from civil cases are lump sums. There are two key differences between lump sum settlements and structured settlements: long term security and taxes. By structuring the money over a longer period of time, a structured settlement offers a better future guarantee of money than a single payout which can be spent quickly. Money you receive from a personal injury is almost always tax free when you receive it. However, once the money is yours, you’re liable for taxes and dividends from the lump sum.

Why People Receive Structured Settlements

STRUCTURED SETTLEMENTS

A structured settlement is a type of annuity that pays out an awards from civil lawsuits.

Personal Injury
A personal injury case is a civil case where someone who’s been harmed files a lawsuit seeking money from the person believed responsible for the harm. Money in the form of a structured settlement helps recipient pay for medical expenses or other costs.

Wrongful Death
A structured settlement is also a common way to compensate the family of someone whose death was the subject of a wrongful death claim. Families may be entitled to receive a stream of tax free payments, to replace the loss of income previously earned by the lost loved one.

Worker’s Compensation
Most people know about workers compensation, which pays out workers who get injured on the job while they recover. Payments can be used for medical treatment and wage replacement during periods when injured employees are unable to work and other expenses.

Structured Settlement Options

Structured settlement recipients have several options to choose from when determining how to receive their award. Structured settlement options include receiving:

  • The entire amount in equal payments over a period of time, also called Time Certain.
  • The entire amount in unequal payments over the period of the Term Certain agreement. For example, the payments may increase or decrease in amount over time.
  • Payments until the recipient dies, also called Life Only.
  • The entire amount in payments until the recipient’s death, at which point a beneficiary will become the new recipient of payments until the term of the agreement has ended.
  • A lump sum payment after the annuity is awarded, or at a later date, such as with a deferred annuity.
  • A lump sum initially for a part of the total amount, followed by recurring payments until the end of the term.
  • Delayed payments that may begin at a certain date or age, such as when the recipient enters retirement.

Pros & Cons to Structured Settlements
Structured settlements are ideally suited for many different types of cases. However, once the terms are in place, they cannot be changed. Because of these inflexible contracts, some recipients choose to sell their payments for a lump-sum payout.

Pros
Structured settlement payments are tax-free.
In the event of the recipient’s premature death, the contract’s designated heir can continue to receive any future guaranteed tax-free payments.

Payments can be scheduled for almost any length of time and can begin immediately or be deferred for as many years as requested. They can include future lump-sum payouts or benefit increases.

Spreading out payments over time can reduce the temptation to make large, extravagant purchases and guarantees future income. This is especially helpful if the recipient has a medical condition that will require long term care.
Unlike stocks, bonds and mutual funds, structured settlements are not dependent on fluctuations of financial markets. Payments are guaranteed by the insurance company that issued the annuity.

A structured settlement often yields, in total, more than a lump-sum payout would because of the interest your annuity may earn over time.

Cons
Once terms are finalized, there’s little you can do to alter them if they do not meet your needs. You cannot renegotiate the terms if your financial situation or the overall economy changes.

Funds are not immediately accessible in case of an emergency, and recipient cannot invest the lump-sum payout in other investments that carry higher rates of return.

Tapping into your structured settlement without selling payments will cost you money. You will pay surrender charges and IRS penalties if you withdraw funds before age 59½.

Some parts of a settlement, such as attorney’s fees and punitive damages can be taxed.

Not all states require insurance companies to disclose their costs to establish a structured settlement or lump-sum annuity. Without this information, a recipient could lose a significant amount of money from their settlement through administrative fees.

Choosing Between Lump Sum and Structured Settlements
Just as there are positives and negatives to electing a structured settlement, there are also pros and cons to electing a lump sum payment. This decision will have long-lasting personal and tax consequences, and should be made under the advisement of a professional such as an accountant or attorney.

When deciding between a lump sum and structured settlement, you should consider factors like:

Tax obligations
Planned large expenses such as mortgage or tuition payments
How risky your spending habits are
Expectations of financial assistance from family or friends
Your financial skills and know-how to manage the full award responsibly

Taxes Decoded: Qualified vs. Unqualified
Structured settlements are often divided into two categories: qualified for tax exemption and unqualified for tax exemption.

Exceptions can exist however, so consult a financial professional when preparing your state and federal taxes.

Qualified Structured Settlements

Qualified
The traditional structured settlement for physical injury or sickness claims must meet certain requirements in order to qualify for tax exemption. These requirements include: the settlement amount has to be placed in an annuity, periodic payments are fixed and determinable as to amount and time of payment, claimant cannot modify the periodic payments, and those payments must be payable to the recipient or liability insurer.

Unqualified
This type of settlement is used when claims for damages fall outside the usual scope of physical injury, sickness or wrongful death and thus are not tax exempt. They are often used for claims involving racial discrimination, sexual harassment, wrongful termination, or violation of the Americans with Disabilities Act of 1990 or the Employee Retirement Income and Securities Act of 1974. The tax benefits differ among the types of transactions.

Qualified Structured Settlements

Structured Settlements and Divorce
When dividing assets in a divorce, structured settlements can subject to being split between the two spouses.
Typically the spouse who doesn’t keep the settlement will get a different asset to balance out the overall division of assets.

How a settlement is handled in a divorce depends on the approach your state takes in asset division. States either divide assets according to community property or by equitable division.

According to community property, anything owned by either spouse before and during the marriage is considered property of the union and can be subject to division. If you live in a state with equitable distribution and you had the settlement before you were married it is likely you will keep the settlement.

In any state, the division of assets doesn’t mean the settlement check itself gets divided. Typically the spouse who doesn’t keep the settlement will get a different asset to balance out the overall division of assets. If you have a settlement and are facing divorce, you may want to hire a lawyer or mediator with experience handling complex assets.

Inheriting a Structured Settlement
The details of your annuity contract should indicate if you are able to designate an heir in the event of your death. The contract should indicate if your payments are are what’s called “guaranteed payments” or if they are “life contingent payments.”

Guaranteed Payments
These are payments which are paid per the contract no matter what. If the person who was awarded the settlement passes away, they can designate an heir to receive those payment instead.

Life Contingent Payments
Considered non-guaranteed, these payments are contingent on the person with the settlement being alive. If the person receiving the payment passes away, the insurance company does not send future payments to an heir.

Rights to Sell Structured Settlements

Structured settlement terms are unable to be renegotiated once the annuity contract has been issued. For some, this means not being able to access their money when they need it.

The structured settlement secondary market emerged because people wanted a way to sell future payments for a lump sum today.

However, for those who have a financial need, there is a way to access their funds by selling payments. The structured settlement secondary market emerged because people wanted a way to sell future payments for a lump sum today. So companies now exist which buy structured settlements in exchange for cash now.

As with any major financial decision, the choice to sell should be something you carefully consider. Federal and state regulations requires the sale of structured settlement payments to go through a judge to ensure it’s in the best interest of the person selling.

Best Structured Settlement Buyers
Selling your structured settlement payments is possible and perfectly legal. Unfortunately unscrupulous companies may try to prey on the financial need of those looking to sell.

Signs of a bad structured settlement buyer:
Misleading behavior, for instance says one thing but puts another thing in writing
Rushes you to sign something you don’t understand
Asking you to lie or misrepresent yourself on a form

Signs of a good structured settlement buyer:

Gives you personalized service with a real person, not an automated telephone system
Takes the time to make sure you understand the selling process
Gives you time to examine the contract
Laws Affecting Structured Settlements

1. Periodic Payment Act
President Ronald Reagan signed the act in 1982, providing the use of structured settlements to seriously injured victims and their families for long-term, tax-free financial security.
2. Federal Protection
Enacted shortly after victims of the 9/11 disaster started receiving financial awards as compensation, it mandated a court appearance when selling structured settlement payments.
3 Legislative Safeguards
Most states have has laws regulating the sale of structured settlement payments. Many ensure sellers receive counseling and instruction before selling their payments.
The Court Process of Structured Settlements
Both the awarding and selling of structured settlements involves a court process.

A: The Defendant uses a structured settlement to give money to the plaintiff while not being liable long term.
B:The defendant works with a qualified assignee to determine the terms of the structured settlements.
C:The qualified assignee works with a life insurance company to purchase an annuity which matches the settlement needs.
D:Then the life insurance company pays the plaintiff a series of payments over time.

  • Selling Structured Settlements Flow Chart
  • Structured Settlement Minors
  • Structured settlements have become popular in accident or personal injury lawsuits involving children.

In the past, many adults acting as parents or guardians of injured children had unlimited discretionary use of a minor’s settlement funds. They spent the money irresponsibly on purchases unrelated to their court-prescribed purposes.

Timed payouts were developed as an alternative to ensure that minors had money for essential long-term necessities, like food, clothing and shelter, and for any continuing medical care.
The process for selling the structured settlements of minors is highly regulated, and these payments are not often approved for transfer.

Because of the danger of parents inappropriately using settlement funds, the process for selling the structured settlements of minors is highly regulated, and these payments are not often approved for transfer.

Buy In Settlement

Structured Settlements

A structured settlements pays out money owed from a legal settlement through periodic payments in the form of a financial product known as an annuity. Money from a personal injury or medical malpractice case gets distributed over a longer period to provide for long term needs.

Structured Settlements

Structured Settlements

When those needs change, the contract typically cannot be changed. However, those receiving settlement payments can choose to sell future payments in exchange for a lump sum.

Structured Settlements Explained
Legal language aside, structured settlements are simple. In a civil case, someone is either forced or agrees to pay someone else money to right a wrong. Instead just writing a check, the at-fault person outs the money towards an annuity from a life insurance company. In that annuity contract are details on the series payments the person who was wronged will receive from the life insurance company.

By structuring the money over a longer period of time, a structured settlement offers a better future guarantee of money than a single payout which can be spent quickly.

The process is around 40 years old. In the 1970s, the courts ruled that a medication called Thalidomide given to pregnant women was responsible for serious, lifelong birth defects, structured settlements emerged as a way to make sure the money awarded to the child lasted a lifetime.

Still, today, most settlements from civil cases are lump sums. There are two key differences between lump sum settlements and structured settlements: long term security and taxes. By structuring the money over a longer period of time, a structured settlement offers a better future guarantee of money than a single payout which can be spent quickly. Money you receive from a personal injury is almost always tax free when you receive it. However, once the money is yours, you’re liable for taxes and dividends from the lump sum.

Why People Receive Structured Settlements

STRUCTURED SETTLEMENTS

A structured settlement is a type of annuity that pays out an awards from civil lawsuits.

Personal Injury
A personal injury case is a civil case where someone who’s been harmed files a lawsuit seeking money from the person believed responsible for the harm. Money in the form of a structured settlement helps recipient pay for medical expenses or other costs.

Wrongful Death
A structured settlement is also a common way to compensate the family of someone whose death was the subject of a wrongful death claim. Families may be entitled to receive a stream of tax free payments, to replace the loss of income previously earned by the lost loved one.

Worker’s Compensation
Most people know about workers compensation, which pays out workers who get injured on the job while they recover. Payments can be used for medical treatment and wage replacement during periods when injured employees are unable to work and other expenses.

Structured Settlement Options

Structured settlement recipients have several options to choose from when determining how to receive their award. Structured settlement options include receiving:

  • The entire amount in equal payments over a period of time, also called Time Certain.
  • The entire amount in unequal payments over the period of the Term Certain agreement. For example, the payments may increase or decrease in amount over time.
  • Payments until the recipient dies, also called Life Only.
  • The entire amount in payments until the recipient’s death, at which point a beneficiary will become the new recipient of payments until the term of the agreement has ended.
  • A lump sum payment after the annuity is awarded, or at a later date, such as with a deferred annuity.
  • A lump sum initially for a part of the total amount, followed by recurring payments until the end of the term.
  • Delayed payments that may begin at a certain date or age, such as when the recipient enters retirement.

Pros & Cons to Structured Settlements
Structured settlements are ideally suited for many different types of cases. However, once the terms are in place, they cannot be changed. Because of these inflexible contracts, some recipients choose to sell their payments for a lump-sum payout.

Pros
Structured settlement payments are tax-free.
In the event of the recipient’s premature death, the contract’s designated heir can continue to receive any future guaranteed tax-free payments.

Payments can be scheduled for almost any length of time and can begin immediately or be deferred for as many years as requested. They can include future lump-sum payouts or benefit increases.

Spreading out payments over time can reduce the temptation to make large, extravagant purchases and guarantees future income. This is especially helpful if the recipient has a medical condition that will require long term care.
Unlike stocks, bonds and mutual funds, structured settlements are not dependent on fluctuations of financial markets. Payments are guaranteed by the insurance company that issued the annuity.

A structured settlement often yields, in total, more than a lump-sum payout would because of the interest your annuity may earn over time.

Cons
Once terms are finalized, there’s little you can do to alter them if they do not meet your needs. You cannot renegotiate the terms if your financial situation or the overall economy changes.

Funds are not immediately accessible in case of an emergency, and recipient cannot invest the lump-sum payout in other investments that carry higher rates of return.

Tapping into your structured settlement without selling payments will cost you money. You will pay surrender charges and IRS penalties if you withdraw funds before age 59½.

Some parts of a settlement, such as attorney’s fees and punitive damages can be taxed.

Not all states require insurance companies to disclose their costs to establish a structured settlement or lump-sum annuity. Without this information, a recipient could lose a significant amount of money from their settlement through administrative fees.

Choosing Between Lump Sum and Structured Settlements
Just as there are positives and negatives to electing a structured settlement, there are also pros and cons to electing a lump sum payment. This decision will have long-lasting personal and tax consequences, and should be made under the advisement of a professional such as an accountant or attorney.

When deciding between a lump sum and structured settlement, you should consider factors like:

Tax obligations
Planned large expenses such as mortgage or tuition payments
How risky your spending habits are
Expectations of financial assistance from family or friends
Your financial skills and know-how to manage the full award responsibly

Taxes Decoded: Qualified vs. Unqualified
Structured settlements are often divided into two categories: qualified for tax exemption and unqualified for tax exemption.

Exceptions can exist however, so consult a financial professional when preparing your state and federal taxes.

Qualified Structured Settlements

Qualified
The traditional structured settlement for physical injury or sickness claims must meet certain requirements in order to qualify for tax exemption. These requirements include: the settlement amount has to be placed in an annuity, periodic payments are fixed and determinable as to amount and time of payment, claimant cannot modify the periodic payments, and those payments must be payable to the recipient or liability insurer.

Unqualified
This type of settlement is used when claims for damages fall outside the usual scope of physical injury, sickness or wrongful death and thus are not tax exempt. They are often used for claims involving racial discrimination, sexual harassment, wrongful termination, or violation of the Americans with Disabilities Act of 1990 or the Employee Retirement Income and Securities Act of 1974. The tax benefits differ among the types of transactions.

Qualified Structured Settlements

Structured Settlements and Divorce
When dividing assets in a divorce, structured settlements can subject to being split between the two spouses.
Typically the spouse who doesn’t keep the settlement will get a different asset to balance out the overall division of assets.

How a settlement is handled in a divorce depends on the approach your state takes in asset division. States either divide assets according to community property or by equitable division.

According to community property, anything owned by either spouse before and during the marriage is considered property of the union and can be subject to division. If you live in a state with equitable distribution and you had the settlement before you were married it is likely you will keep the settlement.

In any state, the division of assets doesn’t mean the settlement check itself gets divided. Typically the spouse who doesn’t keep the settlement will get a different asset to balance out the overall division of assets. If you have a settlement and are facing divorce, you may want to hire a lawyer or mediator with experience handling complex assets.

Inheriting a Structured Settlement
The details of your annuity contract should indicate if you are able to designate an heir in the event of your death. The contract should indicate if your payments are are what’s called “guaranteed payments” or if they are “life contingent payments.”

Guaranteed Payments
These are payments which are paid per the contract no matter what. If the person who was awarded the settlement passes away, they can designate an heir to receive those payment instead.

Life Contingent Payments
Considered non-guaranteed, these payments are contingent on the person with the settlement being alive. If the person receiving the payment passes away, the insurance company does not send future payments to an heir.

Rights to Sell Structured Settlements

Structured settlement terms are unable to be renegotiated once the annuity contract has been issued. For some, this means not being able to access their money when they need it.

The structured settlement secondary market emerged because people wanted a way to sell future payments for a lump sum today.

However, for those who have a financial need, there is a way to access their funds by selling payments. The structured settlement secondary market emerged because people wanted a way to sell future payments for a lump sum today. So companies now exist which buy structured settlements in exchange for cash now.

As with any major financial decision, the choice to sell should be something you carefully consider. Federal and state regulations requires the sale of structured settlement payments to go through a judge to ensure it’s in the best interest of the person selling.

Best Structured Settlement Buyers
Selling your structured settlement payments is possible and perfectly legal. Unfortunately unscrupulous companies may try to prey on the financial need of those looking to sell.

Signs of a bad structured settlement buyer:
Misleading behavior, for instance says one thing but puts another thing in writing
Rushes you to sign something you don’t understand
Asking you to lie or misrepresent yourself on a form

Signs of a good structured settlement buyer:

Gives you personalized service with a real person, not an automated telephone system
Takes the time to make sure you understand the selling process
Gives you time to examine the contract
Laws Affecting Structured Settlements

1. Periodic Payment Act
President Ronald Reagan signed the act in 1982, providing the use of structured settlements to seriously injured victims and their families for long-term, tax-free financial security.
2. Federal Protection
Enacted shortly after victims of the 9/11 disaster started receiving financial awards as compensation, it mandated a court appearance when selling structured settlement payments.
3 Legislative Safeguards
Most states have has laws regulating the sale of structured settlement payments. Many ensure sellers receive counseling and instruction before selling their payments.
The Court Process of Structured Settlements
Both the awarding and selling of structured settlements involves a court process.

A: The Defendant uses a structured settlement to give money to the plaintiff while not being liable long term.
B:The defendant works with a qualified assignee to determine the terms of the structured settlements.
C:The qualified assignee works with a life insurance company to purchase an annuity which matches the settlement needs.
D:Then the life insurance company pays the plaintiff a series of payments over time.

  • Selling Structured Settlements Flow Chart
  • Structured Settlement Minors
  • Structured settlements have become popular in accident or personal injury lawsuits involving children.

In the past, many adults acting as parents or guardians of injured children had unlimited discretionary use of a minor’s settlement funds. They spent the money irresponsibly on purchases unrelated to their court-prescribed purposes.

Timed payouts were developed as an alternative to ensure that minors had money for essential long-term necessities, like food, clothing and shelter, and for any continuing medical care.
The process for selling the structured settlements of minors is highly regulated, and these payments are not often approved for transfer.

Because of the danger of parents inappropriately using settlement funds, the process for selling the structured settlements of minors is highly regulated, and these payments are not often approved for transfer.