Attorney Fee For A Structured Settlement

An attorney fee for a structured settlement can be high or low depending on the amount of time and the amount of distribution awarded to the client. Structured settlements have been successfully used to settle claims resulting from personal injury suits; vehicle accidents, liability of a product, medical malpractice, and workers compensation coverage. Some of these cases are completed in structured settlement litigation. Whenever litigation is required, the rates of an attorney are raised to another level. Future payments made periodically can be income tax free, which makes it an attractive way to receive money. It is also preferred over taxable investments, since the earnings made on an investment are taxable. A claimant can avoid the risks associated with other types of investments. Payments are typically tailored to meet the claimant individual current situation, and can be adjusted as the years progress to fulfill other unique circumstances.

Sometimes a plaintiff will settle a case for a large sum of money. In structured settlement litigation, the defendant, the plaintiff's attorney or a financial planner will advice the claimant to be paid in installments over time rather than in a single lump sum. The attorney fee for a structured settlement usually paid up front by the defendant, but if the fee is very large, it may also be included in the installment payment settlement. A specific advantage of an installment settlement plan is tax avoidance. When set up correctly, installment payments can significantly reduce the claimants tax obligations, and in some cases may even be tax free. These types of payment plans are used for those who are not good at managing money, those that require the money for future needs most importantly, for those who cannot refuse the requests of family and friends, and for minors who are not responsible enough to be able to handle a large sum of money.

There are also disadvantages resulting from structured settlement litigation cases. People that choose this route may feel trapped by the periodic payments. They may wish to purchase a large ticket item, and can't because they can't borrow against future payments from their settlement. Some people will do better with receiving a lump sum, and investing it themselves instead of the additional costs associated with paying and attorney fee for a structured settlement. Many other standard mutual fund and stock investments will provide a greater rate of return than the annuities used in common distribution payments. There are companies that exist who approach people with the hopes of purchasing their distribution settlement in exchange for a lump sum payment. There are only 35% of states within the country that do not restrict the sale of a settlement. Most have enacted laws of restriction for third party purchasers.

People who are paying an attorney fee for a structured settlement should be careful to watch out for potential exploitation in relation to the distribution plan. The first thing to watch out for before going through structured settlement litigation is excessive commissions. Annuities can be very profitable for insurance companies, and often carry with them high commissions. Experts recommend doing the math to be sure that the commissions charged in setting up an annuity don't consume an inappropriate percentage of the principal. Second, claimants should watch out for an overstated value of the annuity by the defendant, or payer. Claimants should compare the commission fees and values of the annuities offered by the payer, with other annuities to check for continuity in price and structure. There have also been cases when the lawyers involved are also in the insurance business and receive kickbacks or cuts of the annuities used. The claimant should be sure that none of the attorneys are causing a conflict of interests.

Claimants should also check around to be sure that their attorney fee for a structured settlement is not too high or over charged for the services rendered during the structured settlement litigation. Unfortunately, but most common is the life expectancy of the claimant. Many people who receive large settlements have a shortened life expectancy as a result of the injuries that warranted the structured settlement. It is important to set up the annuity to pay the estate the remaining money if the claimant should pass away. This way the insurance company does not get to retain the money that they lost in a court ordered settlement. It is also advised for the claimant's protection to purchase annuities from multiple insurance companies. This provides the protection needed in case an insurance company goes bankrupt. Not putting all the eggs in one basket is always a wise way to accumulate a safe return on investment or on money owed. Wisdom comes from seeking the knowledge required to make appropriate choices that can safeguard the financial wealth of an individual, family, or other organization. "When thou vowest a vow unto God, defer not to pay it; for he hath no pleasure in fools: pay that which thou has vowed." (Ecclesiastes 5:4-5)

Add to: File Insurance Business article Teen Photo Images