Truck Accidents: 3 Situations When Structured Settlements May Be A Better Option
Fatal truck accidents happen an average of 11 times each day and kill approximately 4,000 people each year, according to the Federal Motor Carrier Safety Administration. Victims of truck accidents or the family members of the deceased may be legally entitled to monetary compensation. If you are dealing with a truck accident, it's crucial that you speak with a truck accident lawyer immediately in order to determine what your options are. Generally speaking, if you are settling the case, you have the option of taking a lump sum payment or a structured settlement. While there are benefits associated with each type, here are 3 situations when structured settlements are a better option.
To Reduce Tax Payments on Large Settlements
Truck accidents normally result in severe and serious injuries due to the sheer weight of the truck alone. With this in mind, many truck accident settlements are for rather large sums, with some verdicts amounting to several million dollars. When dealing with large settlements, it's generally better to opt for a structured settlement rather than a lump sum payment for many reasons.
For one, a structured settlement will generally be worth more in the long run if it is invested well, since it will not be subject to the effects of inflation. In addition, structured settlements generally are not subject to large tax payments like lump sum payments. If the compensation is going towards the victim, it will be taxed as income. By opting for a structured settlement rather than a lump sum payment, less of the compensation will go towards paying Uncle Sam, and more of it will go towards improving quality of living or receiving the medical treatments necessary for the injuries sustained.
To Protect Minors That Are Involved
If the compensation is to be awarded to a minor, most truck accident lawyers will highly recommend opting for structured settlements for two reasons. One, it is unlikely that a minor will be financially responsible with the settlement that they are awarded in the event that it is a large amount. There is a good chance that the money will be squandered on purchases deemed unnecessary. By opting for a structured settlement, the minor will receive a certain amount each year. This prevents him or her from overspending. Keep in mind that the amount provided each year can vary based on the terms and conditions of the settlement.
Two, in the event that a minor is the recipient, the lump sum payments may go towards a guardian or an adult who is responsible for ensuring that the minor receives proper care or treatment. In this situation, the appointed adult or guardian may be able to access the money and use it based on how he or she deems fit. At times, this may not align with the best interest of the minor, and smaller payments will again help to avoid unnecessary purchases.
To Protect the Family Members of the Deceased
If the truck-accident settlement is to compensate for the future earnings and loss of companionship of a deceased family member, a structured settlement may also be a better option than a lump sum payment. Payments made through a structured settlement are typically tax-free to the recipient in the event that the compensation is awarded to compensate for loss of income and companionship of a deceased family member. This is different from if the structured settlement is going to go towards the actual victim.
In addition, dependency allowances in fatal cases are generally based on the net or after-tax income of the plaintiff. Structured settlements are able to bypass many complications that arise from these areas.
Conclusion
Due to the fact that truck accident settlements tend to be a rather large sum, it's important to speak with a professional attorney, such as those at Arrington Schelin & Munsey PC, as soon as possible to determine what your choices are, and whether a structured settlement or a lump sum payment would be more beneficial for your situation based on the factors involved. Generally speaking, structured settlements offer more protection and tax benefits. In addition, you and your attorney can set up certain terms and conditions that will customize how the structured settlement will be paid out based on your own needs and desires.
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