When you settle a personal injury case, the money you recover is typically paid to you in one of two ways: as a lump sum or as part of a structured settlement.
A lump sum settlement means you receive all of your compensation at once, in a single payment. The full amount is paid shortly after the settlement is finalized or a judgment is entered. This gives you immediate access to your funds, so you can cover your expenses, pay off medical bills, or manage any pressing needs right away.
A structured settlement is different; it breaks up the total payout into a series of scheduled payments made over a period of time. Structured settlements are usually arranged through an annuity, with payments being sent either monthly, annually, or according to a schedule set out during negotiation.
Sometimes they also include bigger payments on certain major life dates or for future medical needs. Our experienced personal injury lawyers in Washington, D.C., can walk you through the legal process with a free consultation.
When a Lump Sum May Make Sense
A lump sum settlement is often the right choice if you need quick access to your money after your case is resolved. This approach can be especially helpful if you have immediate medical or living expenses following your injury. If you’re facing large hospital bills, liens, or debts that have piled up during your recovery, a lump sum gives you the ability to pay these off faster and avoid added interest or collection problems.
This option also appeals to people who want full control of their resources right away, whether to invest for themselves, make a large purchase, or plan long-term with their own advisors.
When a Structured Settlement May Make Sense
A structured settlement is a smart choice if your injuries require ongoing care or dramatically change the way you can work or live. If the settlement is for a child or an adult who needs income for years to come, spreading payments out can offer more security compared to receiving all the funds at once.
Many families prefer a predictable, steady income – it relieves the pressure to manage a single lump sum wisely over decades and can lessen the risk of making quick financial mistakes. Structured payments can also remove the temptation of spending large sums quickly.
Why Legal Guidance Matters When Deciding on a Settlement Structure
Having legal guidance when deciding between a lump sum and a structured settlement can make a real difference in your long-term financial stability and peace of mind. There’s no single “best” option – it really depends on your unique circumstances, health, financial habits, and future goals.
However, an accident lawyer will take the time to listen to your needs and goals and help you decide what’s best for you and your family. They can also connect you with experienced financial and tax professionals as necessary to help you make the right decision.
If you’re unsure which path will serve you best after a settlement or you have any other questions about a personal injury claim, contact us for help. Lightfoot Law, PLLC is here to answer any questions you have.