When accidents and personal injuries occur, they often result in serious damages. You are likely to be dealing with a mountain of medical costs, in addition to lost wages and future losses in earnings due to lingering disabilities. Personal injury lawsuits can be worth anywhere from tens of thousands on up to millions of dollars. If you are successful in winning your claim, you may be offered a structured settlement. It may not provide you with the immediate relief of receiving all of the money you are owed in a lump sum, but these types of settlements can provide you with a steady stream of income while avoiding tax penalties. In this article, we’ll discuss some key pieces of information regarding structured settlements to help you better understand their value.
Structured Settlements In South Carolina
Structured settlements are a type of annuity in which money is put aside in your name and then paid out in a series of periodic payments. Under the South Carolina Code of Laws, the Structured Settlement Protection Act provides rules and guidelines for these payments, as well as for those who administer them. There are generally three situations in which a structured settlement may be used:
When a person is successful in seeking damages as the result of a personal injury claim
When you are entitled to an annuity, either through an inheritance or as the result of a wrongful death claim
When you win a large amount of money, either due to a lottery or sweepstakes
A structured settlement may involve monthly payments that either continue indefinitely or have a specific end date. A partial lump sum payment may also be included, often once a certain amount of payments are made.
Cashing In On A Structured Settlement
Structured settlements may not allow for major purchases or changes in lifestyle, but they do provide tax benefits. There are companies who may offer to purchase your structured settlement, allowing you to take an immediate payoff, but it is important to approach these companies with caution.
Bankrate advises that structured settlement ‘brokers’ often demand a cut of up to 10 percent. These companies may justify this as payment for their services, comparable to the interest rates your bank is likely to charge for a loan. Unfortunately, there are generally other fees involved with these services that, combined with the percentage they keep, could put a big dent in the total amount you receive. Add in the fact that you are likely to owe a significant amount in taxes on your payout, and it is easy to see why selling your structured settlement may be a bad idea.
Get Help Today
Any agreement you make with a structured settlement broker will need to be approved by a judge first. You will need a compelling reason for seeking immediate payout. To discuss this process and whether selling your settlement is the right move in your situation, contact the Surasky Law Firm, LLC. Our Aiken, SC personal injury attorneys provide the professional legal guidance you need in these matters, while helping to ensure your rights and interests are protected. Call or contact us online today to schedule a consultation before taking actions you could eventually regret.