Timeline for Creating a Structured SettlementWith structured settlements, timing is everything. Wait until a settlement agreement is signed, and the opportunity is off the table. Here’s a simple structured settlement timeline.

Settlement Negotiations:

During settlement negotiations, plaintiff and defendant attorneys estimate such costs as the injured party’s ongoing medical care and living and family needs (i.e., possible future medical treatment, in-home nursing expenses, college tuition for dependent children, adjustments to living quarters).

A Settlement is Reached:

Both parties agree to a settlement amount (a combination of cash and annuity payments) to compensate for the damages incurred by the injured party.

Client Discussion:

Once the settlement amount is determined, a discussion with your client should have taken place abut how the client will receive compensation: an upfront lump sum, monthly payments, future lump sum payments at specific dates–or a combination of all three. It is at this time that other issues be considered including tax planning, inflation protection options and the client’s overall financial experience and personal spending habits.

Setting Up the Structure:

When the client decides on a structured settlement, the defendant (or its insurance company) and the court (if the client is a minor or is declared incompetent) agree to the settlement plan. The defendant funds the obligation by purchasing an annuity from a high-rated insurance company. This insurance carrier or “assignee” then takes over the liability from the defendant and begins making payments to the injured party as directed in the settlement agreement.

Of course, a lot more goes into creating a structured settlement than outlined above. Please call me with any questions. Thanks.

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