Benefits and Use Cases of a Structured Settlement Annuity

HomeStructured SettlementsBenefits and Use Cases of a Structured Settlement Annuity

Structured settlement annuities can be used in a variety of situations that can be beneficial to different types of clients. In this article, we’ll highlight two use cases where a structured settlement annuity can make a lot of sense.

When Does Using a Structured Settlement Annuity Make Sense for Minor Clients?

A structured settlement annuity may be the most beneficial option for a minor who is receiving a significant settlement amount due to some type of accident (e.g. a dog bite or an auto accident), and the parents don’t want that child to receive all of those funds at age 18.

We can set up a structured settlement annuity that pays annual, monthly, or semesterly payments starting at 18 years old, effectively giving the child a college fund. This is a common and typical use for a structured settlement.

When Does Using a Structured Settlement Annuity Make Sense for Elderly Clients?

Another situation where a structured settlement annuity makes sense is for elderly clients with fixed incomes. If the clients are conservative investors and they don’t want to take risks in investing those funds in the stock market, often a structured settlement annuity is a great option.

In these situations, we can set up a lifetime annuity, and all or a portion of the funds from the settlement will go into the annuity. The elderly client (and if desired, the client’s spouse) will never outlive that money. If they live beyond 100 years old, the annuity will still keep paying them. 

This lifetime annuity supplements their Social Security Retirement income, gives them a little bit more freedom each month to do the things they want to do, and provides peace of mind knowing they will never outlive their money.

Final Thoughts

Minor clients and elderly clients are two classic use cases of when a structured settlement annuity may be an excellent option. If you have a client in one of these situations, it’s worth exploring whether a structured settlement annuity makes sense. Give us a call, we’d be happy to talk you through it.

You May Also Like…

How Structured Settlement Annuities Help Plaintiffs in Taxable Cases

How Structured Settlement Annuities Help Plaintiffs in Taxable Cases

If you’re a plaintiff navigating a legal settlement, you may be wondering how much money you’ll actually get to keep after taxes and legal fees. Getting a legal settlement or judgment often sounds like you’ll be getting a windfall of cash. But you may be surprised…

Are Punitive Damages Taxable? Here’s What the IRS Says

Are Punitive Damages Taxable? Here’s What the IRS Says

If you’re involved in a lawsuit that may include punitive damages, you may be wondering, “Are punitive damages taxable?”. This is a great questions that many plaintiffs have when navigating legal settlements. In this article we’ll be…