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Should I Consider a Structured Settlement For My Georgia Car Accident Lawsuit?

February 03, 2011

Many Georgia personal injury victims considering an otherwise favorable settlement of their car accident lawsuit or other personal injury claim must consider whether a structured settlement meets their needs. A structured settlement is basically an agreement to pay out a settlement in installments as opposed to a lump sum pay out.

Structured settlements can have tax, estate planning and asset management advantages but also provides less financial flexibility for recipients. Structured settlements are common in personal injury litigation involving large settlement amounts which often are worth hundreds of thousands of dollars and can easily be worth millions of dollars in financial compensation. At Montlick and Associates, Attorneys at Law, we routinely handle serious personal injury cases where large settlement amounts are common. We have provided this article to help Georgia personal injury accident victims understand structured settlements as well as their advantages and disadvantages. The comments provided in this article are, of course, general in nature. An experienced attorney and tax advisor should consider the unique aspects of any particular situation and person or family's circumstances, in order to render advice for a particular transaction.

A structured settlement is typically defined in a contractual agreement, which is part of the overall settlement agreement between the injured party and the defendant in a car accident lawsuit or other personal injury case. The structured settlement will provide a schedule of periodic payments over time that may be monthly, quarterly, annually or according to any other schedule agreed to between the parties. The periodic payments come from one or more annuities purchased from highly rated life insurance companies, or U.S. Treasury bonds. The settlement package may consist of the payment of cash in advance combined with multiple periodic payments including a medical expense annuity, income annuity, educational fund annuity and similar types of financial arrangements.

There are a number of advantages to a structured settlement in a Georgia car accident lawsuit, products liability claim, medical malpractice claim or other personal injury case. A structured settlement can potentially result in favorable tax consequences and other estate planning benefits. Many times the person injured in a serious car accident is the bread winner in the family or manages a family's financial affairs. A structured settlement can assure a recurring and consistent periodic payment so that needed financial resources are not exhausted prematurely. A structured settlement may also prove beneficial where a person suffers catastrophic injuries that involve ongoing medical treatment, rehabilitative therapy and permanent disability. A structured settlement may ensure that resources remain available for long-term care and medical costs.

Despite these advantages, there are certain limitations associated with structured settlements that also need to be considered. A structured settlement means that you do not have access to the entire sum immediately. If you are a savvy investor, you may wish to control the lump sum and utilize your own investment strategies. You may also have expenses arise that make it inconvenient not to have access to the funds faster than the rate of disbursement.

While it is possible to sell a structured settlement if you develop a need for the balance of the settlement funds sooner, companies that purchase structured settlements tend to charge a substantial premium. Georgia state law imposes specific legal requirements and disclosure rules to protect a consumer selling a structured settlement from exploitation by a buyer. Georgia's structured settlement law requires court approval of a structured settlement sale based on a finding that the sale is in the "best interest" of a consumer, taking into account the welfare of the consumer's family. Georgia law recognizes both full and partial annuity purchases. A full annuity purchase involves purchasing the full amount of future annuity payments, while a partial annuity purchase involves purchasing only a portion of future annuity payments over a specified time period.

Structured settlements can be part of Georgia auto accident settlements as well as settlements in other Georgia personal injury lawsuits. An experienced Georgia personal injury lawyer can advise you on whether a structured settlement is well-suited for your needs. At Montlick and Associates, Attorneys at Law, we have represented Georgia residents who have suffered serious injury or wrongful death due to the negligence of others for over 37 years.

Our Georgia car accident attorneys and experienced Georgia personal injury lawyers are available to assist clients throughout all of Georgia and the Southeast, including but not limited to Albany, Athens, Atlanta, Augusta, Columbus, Gainesville, Macon, Marietta, Rome, Roswell, Savannah, Smyrna, Valdosta, Warner Robins and all smaller cities and rural areas in the state. No matter where you are located we are just a phone call away, and we will even come to you. Call us 24 hours a day/7 days a week for your Free Consultation at 1-800-LAW-NEED (1-800-529-6333). You can also visit us online at and use our Free Case Evaluation Form or 24 hour Live Online Chat.

Category: Auto Accidents

Please Note:
Many of our blog articles discuss the law. All information provided about the law is very general in nature and should not be relied upon as legal advice. Every situation is different, and should be analyzed by a lawyer who can provide individualized advice based on the facts involved in your unique situation, and a consideration of all of the nuances of the statutes and case law that apply at the time.