What is structured settlement plan?
A structured settlement plan is a financial arrangement or insurance agreement which includes intermittent payments that an applicant accepts to decide on a personal injury claim or to compromise an obligation of statutory periodic payment. Structured settlement was first introduced in Canada and in United States in the year 1970s and it was introduced as a realistic alternative to lump sum settlements. Presently, this mode of investment has gained wide popularity in common law countries like United States, Australia, Canada, and in England.
However, among the structure settlement plans for these countries a general uniformity is present but in actual tune they are all different in their definitions, standard, rules, and limitations. Structured settlements may include spendthrift and income tax requirements and benefits in its plan and this due to its unique payment arrangement provision, payments are called periodic payments. When a structured settlement gets integrated into a trial judgment plan it is called periodic payment judgment.
There are certain advantages for structured settlement plan. The first and foremost advantage of this investment plan is security and guarantee for income source for life time. The next important advantage of this investment plan is its tax benefit; while you are making structured investment plan you are automatically saving on your taxes.
There is another fact to be remembered and considered. This investment plan is a better option for spendthrifts because this investment plan is a secured way to acquire a fixed monthly income instead of getting a lump sum amount at a time.
There are some negative implications of the structures settlements plans. Before going for any of these plans, you should consider these limiting factors as well. This plan is a fixed plan and does not have any flexibility. So once it is settled, it cannot be modified later. Hence it is of prime importance that before taking a structured settlement plan, you should contact a reliable and experienced attorney and tax adviser.
0 Comments