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Structured Settlements: A Wise Choice for Minors’ Injury Compensation

Accidents happen, especially to our little ones. While most injuries result in minor bumps and bruises, serious accidents can occur, leaving children and their families facing medical bills, emotional distress, and financial strain. When it comes to compensating a child for their injury, handing them a hefty $100,000 check isn’t practical or advisable. Enter the structured settlement—a smart alternative that provides guaranteed future payments, tax benefits, and peace of mind.

What Is a Structured Settlement?

A structured settlement is an innovative financial arrangement that replaces a lump sum payment with a series of periodic payments over time. Rather than receiving all the money upfront, plaintiffs—such as injured children—opt for a structured settlement. Here’s how it works:

  1. Negotiation and Agreement:

  • The plaintiff (injured party) and the defendant (often an insurance company) negotiate terms.

  • Both parties agree on when and how the payments will be made.

  1. Court Approval:

  • The settlement proposal is submitted to the court for approval.

  • Once the court signs off, the structured settlement becomes effective.

  1. Guaranteed Income:

  • Instead of a lump sum, the plaintiff receives periodic payments.

  • These payments can cover medical expenses, education costs, and other needs.

Benefits of Structured Settlements:

  1. Tax-Free Status:

  • Structured settlements offer tax advantages.

  • The interest earned on the settlement funds is tax-free, providing substantial growth over time.

  1. Financial Security:

  • For a 4-year-old child, receiving a large sum all at once is impractical.

  • Structured settlements ensure a steady income stream, even into adulthood.

  1. Example: The College Fund Scenario (Below):

  • Let’s consider your $100,000 injury settlement.

  • Starting at age 18, the child receives annual payments of $51,963.35 for 4 years.

  • Total payout: $207,853!

  • Tax-free and guaranteed.

Addressing Common Concerns:

  1. “My Financial Planner Can Do Better”:

  • While financial planners may offer higher returns, they can’t guarantee them.

  • Structured settlements provide security and predictability, which is crucial for minors.

  • Judges may not allow a minors settlement funds to be invested into risky options.

  1. Fees and Commissions:

  • Unlike financial planners, structured settlements don’t come with hidden fees or commissions.

  • Every dollar goes toward the child’s well-being.

In summary, structured settlements offer a sensible way to manage injury compensation for minors. By ensuring tax-free income and eliminating risks, they provide peace of mind for families facing challenging circumstances. So, when it comes to a child’s future, consider the long-term benefits of structured settlements over a one-time check. 🌟

For more information, contact Mike Hathaway @

or Chris Hathaway @ 248-715-5250.


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