|
|
 Home
>
Structured Settlements
> History of Structured Settlements |
| |
Traditionally, injured parties
involved in personal injury
cases took their settlements as
lump-sum cash payments that were
considered tax free by the
Internal Revenue Service.
(However, any money earned from
the tax-free settlement was (and
is) taxable unless invested in
municipal bonds.)
In the mid-seventies, a new
settlement solution was
introduced.
The Internal Revenue Code
allowed a defendant to purchase
one, or more, annuities to fund
its obligation to the injured
party, who could receive a
portion of the settlement in the
form of periodic payments. This
was the birth of structured
settlements.
 Initially, the concept was used
on large, catastrophic-injury
cases. Today, half of the cases
structured by Ringler Associates
are less than $50,000.
Most structured
settlements include upfront cash
for attorney fees, medical
expenses, and existing liens
resulting from the injury. The
defendant insurance company
purchases one or more annuities
from a highly-rated life
insurance company, which in turn
makes the periodic payments to
the injured party.
Click Here for Life Companies
These payments may be made for
virtually any length of time,
even for the injured persons
lifetime. In the event of the
injured party’s death a
guaranteed portion of the
settlement may be made to his or
her estate or a named
beneficiary such as a spouse or
child.
Since structured settlements
first became popular in the late
seventies, the concept of using
periodic payments to settle tort
claims has become widespread.
Today, it is considered in
virtually every large case, and
in workers’ compensation cases,
and especially in cases
involving minors.
Settlement annuities also are
being used in an increasing
number of claims involving
employment and discrimination,
molestation, Medicare,
environmental, and property loss
with heavy use in construction
defect cases.
Structured settlements can make
the settlement process a win/win
situation for all parties
involved in the settlement
process.
|
|
|
