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FAQ for Trial Attorneys
  1. Introduction
  2. What is a Structured Settlement?
  3. Advantages to the Plaintiff
  4. Disadvantages to the Plaintiff
  5. Managing the Disadvantages
  6. Appropriate Cases
  7. Inappropriate Cases
  8. Case Size
  9. Why Annuities?
  10. Annuity Pricing
  11. Reduced Life Expect. Discounts
  12. What is an "Assignment"?
  13. Structure of the Deal
  14. Insurance Company Ratings
  15. The Closing Process
  16. What Settlement Brokers Do
  17. How Are SS Brokers Paid?
  18. If the Defense Has Their Own Broker, How will My Broker Be Paid?
Home Page > "How to" For Plaintiff Attorneys >ABC's

Inappropriate Cases

Despite the many advantages, some cases should probably not be structured.
  • Income Needs Shorter Than Five Years Structured settlements are designed to generate long-term income; the low yields offered by short-term investments are generally insufficient to cover the administrative costs of setting up the structure while still delivering competitive returns. For this reason, unless the plaintiff is a minor, it is generally not advisable to fund short-term payments with structured settlements.

    [This is true for physical injury cases. The harsh tax treatment to which non-physical tort recoveries are subject may create exceptions to this rule.]

  • Known Liquidity Requirement to the extent is it likely that funds will be needed in the near future (for surgery, down-payment on a house, etc.), it is best to set needed amounts aside in the cash portion of the settlement. Deposit these funds in the bank rather than building them into the structure.