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The Curious Bag
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Structured settlements are payment plans by which an individual is paid on a scheduled basis. They are considered a form of annuity, and there are various reasons for receiving structured settlement payments.
Lawsuits
If someone is awarded a court settlement as the ruling of a lawsuit, the payments will usually be paid through a structured settlement arrangement.
Retirement Annuities
Some retirement programs are designed to be paid through a structured settlement payment plan.
Pay Periods
Payments for structured settlements can be paid in a variety of time periods. The payments are usually monthly, quarterly or yearly.
Who Decides Structure of Payments
In the case of a lawsuit, the payment amount of a structured settlement, as well as the frequency, are decided by parties in the lawsuit and the court. If structured settlement is a retirement plan, the administrator of the plan will determine when and how much the payments will be.
Taxes
If the structured settlement is the result of a lawsuit, the money received in the settlement payments are tax-free. With a retirement annuity, the money received may or may not be taxable, depending upon whether the annuity was funded by money that was taxed before being deposited into the annuity.
Source:
Structured Settlements-Structured Settlement Definition
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