Which Cases Are Not Good Candidates for Structures?

• 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. The claimant should deposit these funds in the bank rather than building them into the structure.