If you have been injured in an accident caused by someone else’s negligence, you could be owed considerable compensation for your injuries, which could be paid through a settlement. Determining the type of settlement structure that best suits your needs is a crucial consideration.
The two major settlement options are lump-sum and structured settlements. An experienced Carlsbad personal injury attorney from the Miller & Steele Law Firm can review the definitions of both with you and help determine the method that best meets your objectives.
What Is a Lump-Sum Settlement?
A lump-sum settlement is paid to you in a single payment. You receive all of the money you are going to obtain from the defendant or their insurance company at one time. You will not receive any future payments. This makes the lump-sum settlement option straightforward.
What Is a Structured Settlement?
A structured settlement provides for ongoing payments. The payout terms may be flexible, allowing them to be structured in a way that better meets your needs. You, your Carlsbad accident attorney, and the defendant’s insurance company may work together to negotiate the terms of a structured settlement.
Pros and Cons of Lump-Sum Settlements
Some of the advantages of a lump-sum settlement include the following:
- You receive all of the funds up front, so you can access the money when you need it.
- You can pay off medical bills and other economic damages earlier.
- You get the settlement funds faster.
- You can choose to invest the settlement funds however you want.
- Your settlement will probably be tax-free.
Some of the downsides of lump-sum settlements include:
- You won’t receive future payments.
- Your settlement does not automatically earn interest.
- You may have difficulty planning for financial needs in the future.
Pros and Cons of Structured Settlements
Some of the advantages of a structured settlement include the following:
- You receive payments in the future, which can help address future needs as they arise.
- You reduce the risk of spending the money too quickly.
- You could earn interest on the settlement.
- The total value of the claim may be more.
Some of the downsides of structured settlements include:
- Your payments will be delayed, so you may not be able to pay off all medical bills and other financial losses immediately.
- You might not have control over how the settlement is managed.
- You might be unable to change the settlement terms if your circumstances change.
Which Settlement Type Is Best for Me?
The settlement type that is right for you depends on various factors, such as:
- Your immediate financial needs
- Your outstanding debts
- Whether you will be able to return to work
- The settlement value
- Your future medical needs
- Tax effect of each option
- How you plan to use your settlement funds
- Your financial management skills and spending habits
Contact The Miller & Steele Law Firm for Legal Advice and Representation
At Miller & Steele Law Firm, we focus on helping accident victims understand their legal rights and fight for legal solutions that best serve their needs. Call 760-439-2210 or contact us online to schedule a free case review.