Four Structured Settlement Questions and Answers

Tax Act

If you have recently come into a large sum of money, you may want to think about setting up a structured settlement instead of receiving a lump sum. While this option isn’t for everyone, it can be beneficial when it comes to budgeting, and paying less tax on your earnings.

Here is a four-question guide to structured settlements.

1. What is a structured settlement?

A structured settlement is when you receive periodic payments for the money awarded in a lawsuit that you have won. It is “structured” because you are agreeing to receive a set amount of that money each month, week or year, and it is a “settlement” because you typically received the money as the result of a settled lawsuit.

2. What if I want/need a lump sum?

Although structured settlement payments have a lot of benefits, it’s also entirely possible to receive a lump sum. One way to do this is to sell lottery payments or other kinds of earnings to a financial assistance company. In exchange for a portion of your earnings, you can get the large chunk of money that you need very quickly.

This can be a good option if you have a lot of debt to pay off, college tuition that needs to be paid before the semester begins or medical bills that add up with interest if they’re put off.

3. What if I need money before my lawsuit case ends?

If you don’t want to take a lump sum, but still need money before your lawsuit comes to an official close, you can often get pre settlement funding from financial assistance institutions.

Some reasons that you may need funding ahead of time include urgent medical bills, car repair in the event of an accident and more. Sometimes, you just can’t wait for the money, and thus, a cash amount is necessary. It’s possible to get between $1,000 and $30,000 in advance. You simply borrow from financial funding companies beforehand and give them a portion of your reward once it’s received.

4. Are there benefits of receiving an annuity payment over a lump sum?

Yes, there are benefits to receiving annuity payments. One of these is tax-related. If you get a lump sum and invest it all at once, you will be taxed on the dividends of your investment. On the other hand, if you receive payments and use them for expenses and purchases, they become tax-free.

It’s also much easier for some people to budget when they have a stream of equal-sum payments coming in periodically. This can help you plan your financial life much easier.

If you are interested in learning about how you can convert a lump sum to structured settlement payments, or vice versa, research online now.


There are many things Brian enjoys writing about, but one of his favorites is finances. If you’d like more information regarding Sell Lottery Payments, please visit

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