How Will You Use Your Personal Injury Settlement?
If you have suffered from some kind of personal injury and are at the settlement stage of the legal process then you may be given a big choice to make. You could, for example, take the payment that is awarded to you as a lump sum. Or you could take it as a series of payments known as a structured settlement.
The decision you make here could be based on many factors. Staggered settlements, for example, often come with a range of attractive tax breaks which make them potentially worth more cash to you over time. But, a lump sum could be useful if you want to do something ‘big’. Here are three questions to ask yourself before you make a decision:
#1 Am I good at managing money? If you are then maybe you could handle a lump sum payment for your settlement. If you have the experience and savvy to invest a lot of money then this could work for you. If, however, your initial reaction to any cash sum is to rush out and spend it on stuff you don’t need then this may not be a good option to take. A structured settlement gives you smaller regular payments that are much easier to manage and the payments are guaranteed.
#2 How bad was my injury? Your circumstances here will vary according to the severity of your actual injury. So, if you are now effectively disabled and/or unable to work then you’ll get more money and need more money than if you suffer from a minor injury. The money you get from a minor injury may just be icing on the cake by the time you get it. The money you get for a major injury could be the money you need to survive on and to pay for your increased needs for the rest of your life. Sometimes, a structured settlements deal will make it easier to cope with long term needs than a lump sum.
#3 What can I do now? If your injury is so bad that you cannot work — either for the short term or forever — then think about taking a structured settlement that can be set up like a regular income. This can be done for a period of time or for the terms of the settlement as a whole. If you can’t do your old job but can work and want to work for yourself then think about a lump sum to get you going. This could be factored into a structured settlement with the rest of the money being paid later.
Getting the right personal injury payout isn’t just about getting as much money as you are entitled to. It’s also all about what you will do with the money and how it will be paid out. For most people in this situation the money they receive here isn’t ‘fun’ money — it’s money that they may need to cater for changed physical or mental needs, for income or for medical expenses over time. The way that this money is paid can make a real difference to your life so look at all your options before you choose the way to go.
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