What is a Personal Injury Lawsuit?
A personal injury lawsuit is a legal dispute that arises when one person suffers harm from an accident or injury, and someone else might be legally responsible for that harm. The responsible party's insurer will pay money to the injured person in compensation for their losses.
Common Types of Personal Injury Cases
- Automobile accidents
- Slip and fall accidents
- Medical malpractice
- Product liability
- Workplace injuries
- Wrongful death
- Dog bites
- Assault and battery
How Does a Personal Injury Settlement Work?
Most personal injury cases are resolved through a settlement rather than a trial. A settlement is an agreement between the injured party (plaintiff) and the responsible party (defendant) or their insurer to resolve the claim for a specific amount of money.
What is a Structured Settlement?
A structured settlement is a financial arrangement in which a claimant agrees to resolve a personal injury tort claim by receiving part or all of a settlement in the form of periodic payments on an agreed schedule, rather than as a lump sum. Under IRC Section 104(a)(2), structured settlement payments from physical personal injury or physical sickness claims are completely income tax-free.
Benefits of a Structured Settlement
- Tax-free income: All payments are free from federal and state income tax.
- Guaranteed payments: Backed by highly rated life insurance companies.
- Customizable: Payments can be designed to match your specific needs.
- Protection from spending: Prevents rapid depletion of settlement funds.
- Government benefit protection: Can be structured to preserve SSI and Medicaid eligibility.
- Long-term security: Can provide income for life or for a specified period.