Two Things To Consider Before Accepting A Structured Settlement

Although many people get a lump sum payment when they settle their auto accident lawsuit, sometimes the option to get a structured settlement is put on the table. With a structured settlement, your money is given to you in payments over a negotiated period of time. While there are many benefits to accepting this offer, such as long-term income and some tax advantages, there are some disadvantages too. Here are two things you should consider before agreeing to a structured settlement.

Do You Have Long-Term Medical Care Needs?

One thing you need to think about is your long-term medical needs. A structured settlement may seem like a good idea when you expect to have medical issues that need to be treated over an extended period of time. However, whether or not it actually is may come down to timing.

For instance, if you expect to need back surgery in 5 to 10 years, then a structured settlement may work well because you'll be receiving payments when you might not have another source of income while you recover. On the other hand, if you're expecting to need several expensive surgeries within the next 12 months, then it may be best to settle for a lump sum payment that can help pay your medical bills if and when your medical insurance runs out.

Take time to discuss your long-term medical needs with your doctor to determine if a structured settlement will offer some protection against financial hardship if you're unable to work because of your treatments.

How Stable Is The Company?

The second thing you'll want to consider is how financially stable the company is. If the company goes bankrupt or closes while you're still receiving payments from them, you may not be able to get the balance of the money owed to you. The longer the term of the structured settlement, the more concerned you should be about the company's longevity.

Have your attorney do an asset and liability check on the company to see how well it's doing. You should also consider how the company is being run and any other legal trouble the business may have gotten into. For instance, if the company was slapped with a class action lawsuit for a bad product, you might want to opt for a lump sum settlement because a class action lawsuit could wipe out the company coffers.

For more information about structured settlements or assistance with deciding if it's right for you, talk to a personal injury attorney. An attorney like those at Monohan & Blankenship may be able to help.