Kingsport, TN asked in Personal Injury for Tennessee

Q: What is the advantage of accepting a lump sum settlement over installments? Isn't the amount the same in the end?

Related Topics:
2 Lawyer Answers
David Alan Wolf
David Alan Wolf
PREMIUM
Answered

A: You asked an excellent question. The amount that you will be paid or that you will receive will depend on the terms and payments. You should discuss this with your attorney or you may want to hire an attorney to review the settlement. It may be beneficial to have the payments over a period of time in the form of an annuity. Make an informed decision before you sign off on the payment arrangements. Good luck.

Matthew E. Wright
Matthew E. Wright
Answered
  • Franklin, TN
  • Licensed in Tennessee

A: Not necessarily. If you mean you have been offered a structured settlement, there are certain benefits to clients that might increase the overall amount over time versus taking a settlement in a lump sum: 1) a structured settlement usually pays an extra amount for interest to compensate for the time value of money; 2) there might be tax savings in accepting the settlement as a structure; and 3) the structure also provides more stability to help ensure you don't run out money. Many clients are not used to the rigors of managing a large amount of money at once and would be better off getting regular payments over a longer time period. You should consult both with your lawyer and with a structured settlement expert.

Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.

The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.

Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.