Did you know that the largest settlement in US history was for victims of the nation’s four largest tobacco companies? The total settlement amount was $206 billion, the companies will pay this amount over 25 years.
Not many people receive a settlement of this size. However, if you are due to receive a large amount of money, you may be wondering how to manage it.
Have you considered benefiting from structured settlements? What are they and why are they a great idea? Why not read on to find out.
What Is a Structured Settlement?
A financial package could be awarded for a number of reasons but most often comes because of legal actions. This could be a court settlement or an insurance settlement.
In the case of a court settlement, you may be awarded compensation or damages after an accident. The amount of money that the court awards to you may be calculated to meet your medical or other expenses for many years.
The result may be that you receive a large amount of money at one time. This is many times not as easy as it sounds.
A large amount of money could make you a target for criminals. On the other hand, you may personally struggle to control your spending of the money that should last you for many years.
Structured settlements can help you to manage this money effectively. A professional company like Rightway Funding can help you ensure that you manage your money effectively.
Benefits of Structured Settlements
The purpose of structured settlements is to ensure that you receive money consistently over a period of time, rather than in a lump sum. This can provide a steady income for years.
If the recipient should pass away, the remainder of the sum will be given to a beneficiary. If the recipient should desire, they can sell the settlement for a lump sum at any time.
What Else Should I Consider?
However, there are some points to be familiar of. If you receive the amount in a lump sum, you can choose to put it into a bank or specialized savings account. Over time this amount could accrue significant interest. If you choose a structured settlement you will not receive this interest.
Once you agree on the structure of the settlements, it can be very difficult to adjust them. Should you choose to withdraw from a structured settlement agreement, there may be financial penalties from both the provider and the IRS.
Getting the Best Out of Structured Settlements
If a court has awarded you compensation, you should think carefully before taking the payment. You may need this money to last for a long time. Should you spend it all at once, you may find yourself struggling to pay for medical costs or other expenses.
This illustrated the value of structured settlements. Allowing someone else to manage the money will help you to ensure that you spend every cent of it in the best way.
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