Structured settlements are arranged payment plans usually for victims who win damages from an injury lawsuit. South Carolina has a statute in place that protects owners of structured settlements and allows for structured settlements to be sold.

Structured Settlements

When a victim wins a large damages award from an injury lawsuit, the parties often agree that the damages will be paid as a structured settlement. The parties can agree to any kind of payment schedule, such as monthly payments paid out over a number of years.

Benefits

There are tax benefits to having a structured settlement. A lump-sum damage award is heavily taxed, but structured settlements are taxed minimally or not at all. Additionally, a structured settlement guarantees long-term income, which is especially important if a victim requires long-term care.

Selling a Structured Settlement

South Carolina's statute does permit the sale of structured settlements. However, if the structured settlement being sold was arranged from a damages award, the court must approve the sale.

Court Approval

A South Carolina court will approve the sale of a structured settlement only if: (1) the transfer is in the victim's best interests, (2) the victim was advised in writing by the purchasing company to seek the advice of independent counsel and (3) the sale does not violate any other existing state statute.

Disadvantages of Selling a Structured Settlement

Selling a structured settlement has two main disadvantages. First, there are tax consequences because your lump-sum payment from the sale will be taxed more heavily than your monthly structured settlement payments. Additionally, the company purchasing your structured settlement wants to make a profit, so its lump-sum payment offer will be considerably lower than the full value of your structured settlement.

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Structured Settlements

Selling a Structured Settlement

Structured Settlements in South Carolina