Are you wondering if everything you’ve heard about a structured settlement is true?
You’re not alone! Even the U.S. Department of Justice admits that this aspect of lawsuit litigation can be complex!
The intense number of details surrounding court approval and other concerns have created a long list of myths. Read this article today to dispel five of the most common misunderstandings about structured settlements.
You Have to Sell All of Your Payments
In some cases, you may find yourself receiving a hard sell about selling all of your payments to protect your financial future. This type of approach often leaves out that you can sell a percentage instead of the whole.
While speaking with representatives, don’t give away that you understand this fact. A company that avoids talking about this option may not deserve to do business with you.
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Your Money Arrives Right Away
You likely have plans for how you can use the settlement to improve your life and finances. However, transactions for your sold payments can take a month or two to complete.
If you’re facing a financial emergency, you may need to find a temporary alternative until the funds arrive. A company like Rightway Funding can provide honest answers about this timing will help you make reliable plans.
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Only Available for Workers’ Compensation, Personal Injury, or Wrongful Death
After looking into options, you may have run across examples of people taking tax-free structured settlements. Since these apply to workers’ compensation, personal injury, and wrongful death, you may assume those are the only cases that can benefit.
Tax-deferred options also exist for other types of cases, including situations like divorce or sexual harassment. If you write off the possibility too early, you could miss out!
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Your Judge Will Tell You If Selling Is a Good Idea
Because a judge has to sign off on selling your future payments, you may have assumed that they will give you advice. The judiciary has a responsibility to protect citizens, but they’re also not financial advisors.
In some cases, judges have signed off on settlement offers with ridiculously high interest. You have the responsibility to ensure that you’re making the right decision for yourself and your family.
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A Traditional Investment Earns More Money
A structured settlement annuity indeed gives small returns, but
they’re also highly stable.
Dealing in individual stocks tends to lead to losses for retail investors. Additionally, the average return for indexes that follow the S&P 500 is limited to the modest 3 – 4% growth the economy has averaged for years.
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Need More Information About a Structured Settlement?
Now that you understand some of the common myths about a structured settlement, what do you do next? Where do you find the information that you need?
The best way to get started is to read more articles, make notes, and ask questions. If you have a co-worker, friend, or family member who has been through this before, lean on them for some trusted advice.
Did you dispel a myth that helped you make a decision today? Check out more of our great content about structured settlements before you go!
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