Before deciding whether you should opt for a structured settlement, be sure to weigh the pros and cons first. A structured settlement may be a good idea if you need money for recurring medical expenses on due to your injury or expect prolonged physical therapy in order to recuperate.



The payment in case of a structured settlement is usually made from interest accruing on a purchased annuity. A structured settlement is binding so once the agreement has been signed, you cannot change your mind about it. If you wish to modify the agreement later because of some unforeseen expenses, you need to go to an attorney to change the terms of your agreement. You cannot use your structured settlement to obtain a new loan either.

There are companies that will purchase the rights to your structured settlement for a lump sum of cash, but they are in it for the investment potential. They will pay you the current day value of your settlement amount, excluding the invested sum. The rules do vary in different states regarding structured settlements. The amount received from structured settlements is taxable in some states.

If you are consulting an attorney to help you with your structured settlement, be sure you fully assess your situation and requirements carefully. Some things to consider before making a decision are:

What are the advantages and disadvantages of the program? Does the lawyer have a track record in negotiating structured settlements? Which is best for your own situation, a structured settlement or a lump sum of money? Will there be any tax benefit if you opt for a structured settlement? Will you get adequate money on time to cover all your expenses? How is it going to be in case of future contingencies, and if your requirement for money increases? Is it possible to change the terms of the structured settlement later? Can you decide later to change the program and opt for a lump sum payment?

It is wise to have a list of questions ready before you speak to a lawyer. The questions should be specific and relevant to your situation. Once you meet the lawyer, you can already gauge whether he/she is a good choice in handling your structured settlement. You should be certain that your lawyer has your best interest at heart, and if you are not sure, get a second opinion or consult with your own financial planner.

Make an informed decision only after you have had all your questions answered. This is an extremely important decision to take, one that will affect your future and that of your family. Enter into an agreement only if you are confident that you have made the right decision for yourself and your family.