Structured Settlements

Full Video Transcript

If you've ever fantasized about winning the lottery, then you're already familiar with structured settlements. These are the payment arrangements made to provide you with small payments over a long period of time. In law, you may agree to a structured settlement because the final payout for the smaller payments is larger than the lump sum. For example, if you were injured in a car accident, the defendant may be willing to settle your case for $100,000 up front, or 55 monthly payments of $2000. If you choose the smaller payments, you won't get as much initially, but after 55 months you will have received $110,000. If you're on the receiving end of a structured settlement and something happens that results in you needing money right away, you may be able to sell your rights to receive future payments to a third party in exchange for a lump sum. However, just like before, this lump sum will be smaller than what otherwise would have been paid had you received all the smaller monthly payments.

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