If you have been involved in an accident in New York, you may be entitled to money for your injuries. Whether or not you obtain a settlement or obtain a monetary judgment against a tortfeasor depends on whether you met the New York State Threshold requirements for bringing a lawsuit in a motor vehicle accident case. Assuming that you have overcome liability, met the threshold requirements and you have reached a settlement agreement with the tortfeasor or his/her insurance company, you may have to make an important decision on how you will receive compensation for your case.
There are normally two options available for clients who obtain a settlement or an award from a jury depending on the amount of money involved. You may either receive a lump sum or a structured settlement. Every case is different, and each client’s needs are unique. What is right for one client’s situation may not be right for another, so it is extremely important that you examine your individual needs and options before accepting a lump sum or a structured settlement.
Structured Settlements vs. Lump Sums
For many clients who are awarded large verdicts or obtain large settlements a structured settlement is an ideal arrangement for receiving compensation. Structured settlements can be set up in many different ways but the most common we have seen is where they either pay out a sum of money in small increments over a period of time or they payout a lump sum of money after a certain period of time, which could be as little as 5 years to as long as 30 years. This lump sum of money can double or even triple the actual amount of the verdict or settlement depending on the length of time it remains in the structure.
Monthly payments can help to cover continuing expenses related to your case and help you avoid the overspending and mismanagement that sometimes come with receiving a large sum of money all at once. All payments received via a structured settlement are exempt from taxes by both the state and the federal government, and a payment plan can be set up to anticipate future expenses.
Structured settlements, however, do offer some disadvantages. Often a structured settlement is invested for you by a third company, usually an insurance company. In this situation you normally do not have the option to invest the money in the market of your choice. You are usually stuck with the company chosen by the insurance company paying the settlement or award. Once you have accepted a structured settlement, you will usually be unable to adjust the payment plan to suit your changing needs. On the other hand, a lump sum received from a lawsuit is also tax free, and can be used to pay for large expenses or invested as you see fit. If you are set to receive a smaller settlement in your lawsuit, or if you have large medical bills or expenses that need to be paid immediately, a structured settlement may not be an ideal choice.
Before choosing a lump sum or a structured settlement for compensation after a lawsuit it is important that you speak with your attorney and even a financial advisor to examine your personal needs and options.
Jordan Masiakos, P.C. Attorney At Law 200 Willis Avenue Mineola, New York 11501 Tel: 516-873-0795 Fax: 516-873-6686 Email: masiakoslaw@optonline.net Web: www.masiakoslaw.com
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If you have suffered an injury or property damage claim, you may want to be careful what you say to your insurer. Some words may raise “red flags” which could result in a delay of your claim or even an outright denial.
g a claim by saying “I think . . .” or “I guess . . .”. If you aren’t sure, don’t guess. Don’t make up an answer just for the sake of answering. It’s always better to say “I don’t know” if you are not sure how to answer a question. Give them only the facts.
in you may have. If you feel neck pain after an accident, don’t use the word “whiplash” or “sprain/strain”. Simply tell the insurer you have neck pain.
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