If you have been injured by someone else’s negligence in Southern California, take your case at once to an Orange County personal injury attorney. You may be entitled to compensation for your medical costs, lost wages, pain, suffering, and other related losses and damages.
Anyone may be injured in an accident caused by someone else’s negligence. Most compensation payments to injury victims in the State of California are made as lump sums, but injury victims may choose to receive compensation over time, in monthly, quarterly, or annual installments.
If you recover compensation after a personal injury, is it better to receive your compensation through a structured payment plan or as a one-time lump sum? Keep reading for a brief discussion of lump sum payments, structured settlement plans, and your rights.
What Are “Structured” Settlements?
Most people in California who are injured by someone else’s negligence want their compensation paid as a single lump sum. However, in some uncommon circumstances, it might be more advantageous to choose a structured payment plan.
With a structured plan, compensation payments are made regularly, usually for a number of years. When should you choose a structured payment plan to settle a personal injury case? It depends on the case, the circumstances, and the parties who are involved.
With a Structured Settlement, How is Your Attorney Paid?
Structured payment plans can be quite complicated. For example, some structured payment plans can be designed to provide payments for the rest of a person’s life.
After your personal injury matter concludes, your attorney’s fee is paid out of your total compensation, so your first payment with a structured plan may be a large enough amount to cover that fee. Subsequently, you will probably receive smaller, regular payments.
How Does a Structured Settlement Work?
If a plaintiff and a defendant agree upon a structured settlement plan, the funds for compensation are typically transferred to a life insurance company that handles structured payments.
If your own compensation is handled this way, you must be sure that the life insurance firm is respected, reputable, and highly-rated. If the life insurance company ever fails or files for bankruptcy, your compensation could vanish.
For that reason, any structured settlement plan will entail at least a slight risk. At the conclusion of the personal injury process, the terms and conditions of a structured payment plan are negotiable, including:
- When will compensation payments be made, and for how long will payments be made?
- What will be the amount of each payment?
- Upon your death, if payments are still due, will those payments go to your heirs?
Is a Lump Sum Payment or a Structured Payment Plan the Better Choice?
A lump sum payment ends a personal injury case. When you receive the compensation check, all of the financial and legal aspects of your case are resolved. In most cases, it is best to insist on your payment in a single lump sum for any amount below $500,000.
But for larger compensation sums, a structured payment arrangement may offer advantages. A structured plan prevents you from losing all of your compensation at once. Some personal injury victims don’t handle their new prosperity wisely, and they’re quickly broke or in debt.
A structured payment plan also helps when you pay your taxes. Because your full compensation amount is never all in the bank at any one time, you will pay less in taxes each year on any interest or dividends your compensation earns.
What Advantages Do Lump Sum Payments Offer?
As mentioned previously, the primary advantage of acquiring your settlement as a single lump sum is finality. You get your money and the case is over. If you have creditors who need to be paid, your lump sum payment lets you pay off those creditors, usually in full.
If you anticipate buying another home or starting up a business after you are compensated, you will very likely need a lump sum payment. If the compensation amount is modest, there is no particular advantage to choosing a structured settlement and waiting to receive your payments.
It is a good idea to have your Orange County personal injury lawyer go over your options with you. If the compensation amount is substantial, have your attorney discuss the pros and cons of structured settlement plans and lump sum payments.
What Can Victims of Negligence Expect to Receive?
Your personal injury claim is unique. There is no “average” compensation amount, and until an attorney reviews your claim, there is no way to even make a guess. The compensation you recover will depend on a number of factors including but not limited to:
- the severity of your personal injuries
- the amount of your medical expenses
- if you are employed, the income you lost while you were unable to work
- your share of the fault (if any) for the accident
- your accident-related personal pain, suffering, and emotional distress
You may receive three types of compensation or “damages.” Economic damages compensate you for the quantifiable losses you can document with medical bills and other records. You receive noneconomic damages as compensation for your pain, suffering, and emotional distress.
Punitive damages are rare in California personal injury cases. Punitive damages are meant to penalize egregious negligence and prevent it in the future. Your attorney will determine if you should seek punitive damages in your own personal injury case.
What Else Will Your Personal Injury Attorney Do for You?
If you’ve been injured in an accident that was not your fault in Southern California – in a traffic collision or any other type of accident – seek medical treatment immediately, and then put your case in the hands of an Orange County personal injury attorney.
It may be difficult to prove another person injured you, but your Orange County personal injury lawyer will investigate the accident, identify the liable party or parties, protect your legal rights, and aggressively fight for the justice and compensation you need.
If you are deciding between a structured payment plan and a one-time, lump sum payment, it means your claim has succeeded and your lawyer has acquired your compensation at the conclusion of a lengthy process.
You will need a personal injury attorney’s guidance and advice through each step of that process. If you are injured because someone else was negligent – now or in the future – contact a California personal injury lawyer immediately, and put the law to work for you.