Ilan Cuellar, CFP®, PPC™, CPFA

(281) 815-4108 ext. 1011

Is a Structured Settlement right for me?

Injuries and catastrophic events are often traumatic and destabilizing, leaving the victim with extraordinary needs.  Through LPL's partnership with AVITAS, we are positioned to lead and dedicate high quality structured settlement services to help you tailor a financial plan to meet your needs for income, medical care, education, retirement and other future needs.

What is a Structured Settlement?

A structured settlement is a voluntary agreement reached between an injured party and the defendant under which the plaintiff receives compensation in a stream of guaranteed, tax-free periodic payments.  Such an arrangement may be agreed to privately, as in a pre-trial settlement, or it may be required by a court order, as in a settlement or judgment involving a minor.  Congress created structure settlements because of the risks and disadvantages with selecting a lump sum payment.  The specific tax rules of a structured settlement are governed by Section 104(a) and Section 130 of the Internal Revenue Code.  Structured settlement payments are paid to the claimant through a structured settlement annuity which is issued by a life insurance carrier.

Benefits to Structuring a Personal Physical Injury Settlement

- The full amount of the damage payment(s) is tax-free, exempt from federal and state income taxes under 104(a) of the IRS codes.

- The injured party receives compensation when needed as determined at the time of the settlement.  In other words, almost everything about a structured settlement can be negotiated including the length, how often you want to receive money, how much money to receive, whether you want a portion up-front, whether you want to continue a payout to your heirs, etc.

- The claimant receives payments from two of the safest investments available- life insurance company annuities and U.S. Treasuries.

Types of Cases Ideally Suited for Structured Settlements

- Temporarily or permanently disabled plaintiffs or claimants.

- Guardianship cases, including minors or incompetents.

- Wrongful death cases where the surviving spouse and/or children need monthly or annual income.

- Workers' compensation disability and fatality claims.

Is a structured settlement right for me?

It is important to seek out a qualified financial planner before the settlement in order to discuss your best options.  In some cases, a structured settlement may be the route to go.  In others, a lump sum payout and investing outside of a structured settlement will be the best option for you.  We are an independent firm and put your interests first.  In other words, it does not benefit us more to do a structured settlement vs. a lump sum payout in any way.  Some firms only deal with structured settlements and do not have a fee based wealth management arm.  Therefore, they will often push for a structured settlement when it may not be the best option for you.  We can sit down for a complimentary consultation and discuss the specifics of your case to determine which route is the best for you.

If it is determined that a structured settlement is beneficial, then we will be with you every step of the way, even meeting with your legal team to ensure the financial transaction is processed in accordance with IRS code.

Contact us today for a complimentary consultation!