How Structured Settlements and Annuity Payments Work

Sometimes we find ourselves dealing with a bit of a litigious situation, and these can often come with a whole lot of complicated legal jargon and technical-sounding words that aren’t fun to deal with. In fact, trips to the courthouse are rarely fun for any reason, and when you have to deal with a lawsuit, from any side, you can often find yourself just wishing it was all over. Part of getting through a situation like that as quickly as possible, however, is knowing what it is you’re dealing with, so you can best navigate the decisions that you’re going to be required to make. A lot of times, when a lawsuit or monetary claim of some sort is made, one party winds up either winning or losing. The winner of the case is usually awarded a sum of money, and the loser is ordered to pay that money. When a case goes to court, such as a lawsuit, there are basically three ways things can end up. The case can be decided in court, it can be dismissed completely, or it can be settled out of court. When your case is dismissed, you’re basically on your own. If you reach a verdict in court, however, or decide to settle out of court, then you’re going to have some decisions make. It’s very likely that one of these decisions is going to involve the way that you accept payment for your settlement award. It’s not uncommon for the amount of money that is awarded as a result of a lawsuit or another such case to be pretty large. As such, the loser might not be able to pay it all right away.

When this is the case, you’ll most likely be offered something called a structured settlement. This basically means that the party paying you the settlement amount is going to do it over a period of time. You won’t wind up getting your award in one lump sum, as a result, but will instead receive it over a number of years. The amount of the installments that come your way, and how often they arrive are going to be up to you and the paying party. You are allowed to negotiate those terms, and might have the judge’s assistance in working them out. Either way, you get to make sure that you’re comfortable with the way your award gets distributed. It’s most likely that you’ll come out ahead in the long run if you receive a structured settlement, as the interest that comes with it winds up adding to the overall sum of money you wind up receiving.

Annuity payments are basically payments toward a total sum that come to you once per year, and are a form of structured settlement that the other party might opt to use. This still might be a good option, however, as it’ll ultimately wind up increasing the amount of money you actually receive by a pretty good amount. Few things are pleasant about dealing with a lawsuit, but if you wind up receiving¬†cash for structured settlement or annuity payments, then it’s nice to know that you’re actually coming away with something extra.