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Fox Farley Willis & Burnette Attorneys At Law
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Should You Accept a Structured Settlement in Your Case?


In personal injury cases with significant damage awards, victims may find their attorney discussing a structured settlement with them. These are often proposed by Defendants as a way to settle cases. But what is a structured settlement, and how does it affect you?

What is a Structured Settlement?

Structured settlements are basically settlements where you don’t get all the settlement money at once but rather, you will receive payments over a period of time. Before you ask why anybody would opt for that, there are some benefits.

One benefit is that a Defendant is often more willing to pay more as a  settlement, if the settlement is in the form of a structured settlement. So, you are getting a larger recovery—even though you have to wait to receive all of it.

Another benefit is taxes. Yes, many kinds of personal injury settlements are not taxable anyway. As a general rule, settlement monies that replace wages (like past and future lost wages) are taxable, as is money from a settlement that involves mental injury only, with no physical injury. Other kinds of compensation, such as pain and suffering or loss of enjoyment of life, may not be.

To the extent your injury settlement may be taxable—and it may not be at all—a structured settlement can avoid these taxes, or lower the tax burden.

Use of Annuities

Most structured settlements actually are in the form of annuities, and some kinds of annuities may be protected from taxes or even bankruptcy, depending on the type of annuity purchased. And although annuities pay out over periodic payments over time, this may not be a bad thing—it may allow you to avoid spending too much money at one time, or allow you to control your income, if for some reason you need to keep income lower (for example, for lower student loan payments, or to receive certain government benefits).

Some annuities will allow you to receive a lump sum up front, more than the regular payments, so you will receive funds you need to get you back on your feet in the short term-but you won’t get all the cash up front the way you would with a traditional settlement.

Annuities are investments, albeit very very safe ones. That means you won’t get a huge amount of return on the investment, and your investment and thus payouts may fluctuate slightly, depending on the state of the economy. But they are still relatively safe from massive losses as well.

Experts Can Help

Annuities and structured settlements can be complex; in many cases an annuity or settlement structure professional may work with your attorney, to help you understand what your particular structured settlement would provide to you. Different annuities may provide different payouts at different times, but you may find that an annuity pays enough over time, that you can get your case settlement sooner than you think you could.

We can help you learn what kind of settlement will work for you–or whether you should go to trial. Call the Knoxville personal injury lawyers at Fox Farley Willis & Burnette, PLLC, today.


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