Peachtree People Blog

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What Is a Structured Settlement?

A structured settlement is a legal settlement through which a claimant agrees to resolve a personal injury, wrongful death, or other tort claim by receiving part or all of a settlement in the form of regular or periodic payments on a predetermined schedule, rather than as a lump-sum payment all at once. As part of the negotiations or legal proceedings, a structured settlement may be offered by the defendant in a case or it could be requested by the plaintiff. At the end of the day, both parties must agree on the specific terms of settlement. A settlement may allow both parties to a lawsuit to reduce legal and other costs by avoiding a trial.

Structured settlements are used in a wide variety of lawsuit settlements such as medical malpractice, auto, and product liability.

Often the periodic payments will be funded through the purchase of one or more annuities. These annuities, which are financial assets in and of themselves, are used to generate the structured settlement payment stream. Structured settlement payments may also be referred to as periodic payments or annuity payments.

While some legal settlements offer a lump-sum payment option, which provides a one-time sum of money, a structured settlement provides a person payments on a regular basis for a set period of time. Structured settlement payments are a unique asset, so it is important to know what you options are. It is possible to sell all or only a portion of your future structured settlement payments. The sale of your structured settlement payments must be approved by a judge.

All transactions are at Peachtree’s sole discretion and are subject to court approval and other underwriting requirements. Peachtree does not provide legal, tax, or financial advice; please consult with appropriate independent professionals for such advice.

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