Picture an 18 years elderly with a huge pile of money from lump sum settlement, the risks of overspend or being conned is high. Now imagine the same person gets a fix smaller periodic amount from structured settlement, the risk of being targeted by con man is maximum. So is the chance of wasting the money recklessly.
Structured settlement in general comes with a few advantages that conventional lump sum money settlements do not give. A few major plus points include the elimination of dissipation risks involve with lump sum money settlement and tax exemption on the settlement income.
In United States, favorable tax treatment rules have been extended to the money received under annuity payment agreement in order to encourage the use of structured settlement system. For instant, money income from structured settlement payment are not included in gross income when filing tax, this means that the payment from structured settlement is non-taxable.
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