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Are structured settlements good ideas in product liability cases?

It's common knowledge in legal circles that the majority of civil liability cases are settled before ever reaching the trial phase. There are many reasons for this, including:

-- The high cost of putting on a trial

-- The logjam of cases that would slow the legal system to a crawl if all cases were set for trial

When a settlement has been reached between the parties, the payments can be made either as one lump sum or stretched out over time in a series of scheduled disbursements. This is often referred to as a structured settlement.

This arrangement can be beneficial in cases where a product liability case results in catastrophic injuries to a plaintiff. Structured settlements allow a defendant's insurance company to fund an annuity to produce an ongoing revenue stream of income for the duration of the structured settlement.

Some good reasons to accept a structured settlement include:

-- Avoiding tax liabilities that can affect lump sum payments. Annuity funds remain tax-free if the plaintiff is not the one controlling the funds.

-- Annuities are professionally managed by financial planners to assure the availability of funds for future expenses.

-- Many plaintiffs who accept lump sum payments blow their money frivolously and have nothing left within only a few years. They may not be able to return to work and have to rely on government benefits to get by. Structured settlements preserve funds for all stages of a plaintiff's disability.

-- Annuities can be designed to meet specific needs and future contingencies.

-- Portions of the settlement can be set aside in the event that future medical advances or treatments are designed to address the plaintiff's injuries or disabilities.

-- A combination lump sum/structured settlement can be implemented to pay off rehab and medical bills or to repay debts accrued during the pendency of the litigation.

If you are wondering if a structured settlement is a good idea for your product liability case, your personal injury attorney can address your concerns.

Source: Findlaw, "Structured Settlements: Pros and Cons," accessed Sep. 04, 201

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