A structured settlement also known as a periodic settlement is one way of claiming compensation for any civil wrong done, also called a tort. Before understanding the idea of the settlement, one needs to get familiar with a few terms. If any damage is done to you or your property by someone, and you decide to take the matter to the court, you are the claimant or the plaintiff who is filing a case against a defendant. If you wish to claim the compensation in parts, no in lumpsum amounts, you need to approach a qualified assignee who will look into the matters further. The settlement will be deposited at regular pre-set intervals in the form of an insurance.
The Conditions of Claim
A civil wrong could be anything from a physical, emotional, economic or reputational injury to any violation of constitutional rights. You can claim a compensation under any circumstances that lead to damage or injury to the above-mentioned areas. A court judgment against the defender is a prerequisite for you to proceed with a structured settlement.
The Terms of Settlement
Once you hire a qualified assignee, the terms of settlement such as the total number of deposits to be made, the intervals of the deposit, the total amount to be claimed, decisions regarding any increase in the deposits gradually etc. are decided in the presence and agreement of both the defendant and plaintiff. The deposits are made in the form of insured deposits in the name of the plaintiff. Once the terms of the settlement are finalized, neither parties can make any changes whatsoever.
A Look at the Perks
A structured settlement has its own trail of advantages-
- The money deposited in the form of insurance is the best way to keep your money safe from being spent at one go.
- This is a better option when the compensation is made to a minor as it can be used for the future.
- The law exempts structured settlement from any kind of income tax; thus saving any unnecessary loss of money.
This mode of settlement is wide acclaimed in countries such as Australia, Canada, England, and the U.S. A structured settlement could be seen as a humane way of claiming compensation for your damage. Allowing the defendant to pay back in installments could make the punishment a lot less harsh. All said and done, this is a win-win situation; you get your money, and you can secure your future with it.