Under some circumstances, getting a lump-sum payment for your personal injury case may not be the best option. In this case, you may have the choice of receiving deferred compensation, also known as a structured settlement.
Deferred compensation is an agreement by which you do not receive all the money due to you immediately. Instead, it is delayed and paid out in installments. You can discuss your options for this with an attorney at a personal injury law firm if you believe it may be the best thing for you and your family.
Understanding Deferred Compensation
The most common deferred compensation plans have nothing to do with insurance claims or lawsuits. When a worker opts to put away a portion of their income into a pension or retirement plan so they can use it at a later date, they are using a deferred compensation plan.
According to Annuity.org, structured settlements can also be arranged in many types of civil legal cases, such as:
- Personal injury claims
- Workers’ compensation cases
- Medical malpractice claims
- Wrongful death actions
For a free legal consultation, call 800-537-8185
Deferred Compensation in Personal Injury Cases
When an injured party wins a civil case, they are entitled to either an insurance settlement or an award granted by the jury. While these can be worth several thousand dollars, they depend greatly on the circumstances of the case.
When there are catastrophic injuries, the party requires ongoing care and support, or they cannot return to work because of lasting injuries, damages could reach six figures or higher.
Most personal injury cases are paid out as a lump sum. However, this is not always the best option for the family. They may not need all that money today. Instead, they may want to ensure they have access to payments regularly. This may make deferring the payments a good option. Under a structured settlement, they can receive scheduled tax-free deposits.
What Should I Do to Learn More About Structured Settlements?
You can talk to your attorney to learn more about the possibility of deferring compensation after your case. You will need to have the arrangement in place before signing the settlement agreement or receiving the court award. Most law firms can help you navigate this process and may recommend a settlement planning professional to handle your deferred payments.
What If There Is a Problem With a Previous Agreement?
You may have found yourself on this page because you have questions or concerns about a previous deferred compensation agreement. You may speak with an attorney to learn more and get help with issues such as:
- Miscalculation of your compensation payment
- Transferring the benefits to another beneficiary
- Breach of contract concerns
- Making changes to your agreement
- Changing the fiduciary of your compensation
An attorney may be able to help you with any deferred compensation agreement, whether you are an injury victim or an employee. You can likely get a free case consultation to learn how they can help before you sign on for representation.
Work With Your Attorney to Learn More About Deferred Compensation
Deferred payments can be a great option for those who will likely receive significant compensation and need to use it for treatment and living expenses over an extended period. Handling it this way also ensures it remains tax-free under federal laws.
However, there are pros and cons of these arrangements. You will want to discuss this at length with your personal injury lawyer to decide what is best based on the specific circumstances of your case, financial recovery, and necessary expenditures. Your attorney can also offer guidance on how deferred compensation has worked for other clients in similar situations.
In addition to developing your case, filing your claim, and protecting your rights, your lawyer can offer you advice based on your best interests. This may include whether to pursue an out-of-court settlement or go to trial. Likewise, they can help you decide if a structured settlement may be a good option for you.
Attorneys from Morris Bart, LLC Provide Free Consultations
The Morris Bart law firm provides complimentary case assessments for personal injury accident victims in our service area, which includes all of Alabama, Arkansas, Louisiana, and Mississippi. We have 15 locations and work on a contingency-fee basis. You can reach us today to learn more about your legal options and rights based on the facts of your case.
Call (800) 537-8185 to speak with an attorney about what you should do next.
to find a Morris Bart office near you.