The Difference Between Lump-Sum and Structured Settlement Payouts For Personal Injury Claims

Colorado Personal Injury Lawyer Can Assist Claims

A personal injury lawsuit can occur when a person is injured due to someone else’s negligence or reckless conduct, and are sometimes based on strict liability, meaning a person is held legally responsible for the consequences of the accident. In injury cases, the person can file a lawsuit to receive compensation for injuries, emotional distress, loss of consortium, and damages from the accident. Some of the most common injury cases filed include medical malpractice, wrongful death, car accidents, and slip and fall cases. According to the Centers for Disease Control and Prevention (CDC), “There were 92.2 million visits to physician offices and 41.6 million emergency department visits, which includes visits for adverse effects of treatment.”

If you or someone you know is attempting to file an injury lawsuit, you need a Colorado personal injury lawyer from Heuser & Heuser, L.L.P. Lawsuit claims can vary depending upon the severeness of the injury and can determine what type of payment one will receive. For example, when an individual is owed money for a lawsuit, it can be paid through either lump-sum payouts or structured settlement payments.

Most accident cases are settled out of court, and the lawyers for the plaintiff and the defendant come to an agreement on terms for the settlement amount. Numerous lawsuit payouts involving civil cases are paid out as lump-sums. Two main factors that distinguish lump-sum and structured settlement payouts are tax liability and long-term security.

Lump-Sum Payouts

In a lump-sum payout, people receive the entire amount of the settlement. Often lump-sums are spent quickly because the money is offered in a large amount at one time.

There are a few factors one should consider before accepting a lawsuit claim:

  1. Spending habits- It can be tempting to spend large amounts of money on items that are not necessary when one receives a large cash payout. It’s important to consider what type of spending habits one has before accepting a lawsuit payout.
  2. Financial skills-  A substantial investment such as a lump-sum can be challenging to manage without a qualified financial advisor. In some cases, people learn how to handle the investment while others seek financial advice.
  3. Consider the tax obligations- One must prepare for tax liability when you manage a lump-sum payment. Although any type of settlement you may receive in a personal injury case will be tax-free when you first receive it, once a lump-sum settlement is in your possession you will be tax liable for any earnings you receive from investing the lump-sum.

Structured Settlement Payments

A structured settlement is a financial or insurance arrangement that has been negotiated and settled for the injured party in an accident. In structured settlements, the person has agreed to an injury claim by obtaining compensation over a course of payments. This type of settlement is when the claimant receives money over a particular period of time which is longer than a single payout amount. If an individual requires continued medical care and is not able to earn income, it makes more sense for the person to begin payments as soon as possible. There are essential facts to be aware of when handling a structured settlement claim:

  1. Payment schedule- There are multiple ways an individual can receive payments such as annually, quarterly, or on a monthly basis.
  2. Increasing payments- A structured settlement annuity has the opportunity to earn interest. This ability allows payments to increase to keep up with the inflation rate.
  3. Decreasing payments- There is a chance that payments can decrease. Some settlements begin high and could potentially decrease over time. For example, if health care rates decrease, this could lower the payments you are owed to cover your medical costs.

Speak with an Injury Attorney

Our Colorado personal injury lawyers understand the challenges that a person may face after an accident, and we are prepared to assist those who have suffered an injury through no fault of their own. Various elements can help with a personal injury case when attempting to prove that you suffered because of someone else’s careless actions, such as damages including medical bills and pain and suffering. Another element would be the “but-for” test. This is where you prove if it weren’t for the other person’s actions the injury wouldn’t have occurred. Elements such as damages and the “but-for” test can help impact a lawsuit claim. That is why a Colorado personal injury attorney can help you gain the settlement you deserve. Heuser & Heuser, L.L.P., has served the community for more than 30 years. Our attorneys want injured people to return to their lives as normally as possible while we handle their cases. Call us today at (719) 520-9909(719) 520-9909 or fill out our free consultation form.

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Frequently Asked Questions

There are a variety of things we look at when evaluating your case and determining its value. We look at how the accident occurred. We look at what sort of injuries you sustained. Do you have a permanent injury that will last the rest of your life? Are you going to have future medical bills? We look at lost wages. Did you lose your job? If you have permanent work restrictions as a result of the accident, you may not be able to find a job very easily in the future. These are some of the factors that we look at in evaluating a claim. Every case is unique and different. That’s why at our law firm, every case gets personal attention from the lawyer when it comes time to evaluate.

Insurance companies are in business for a reason: to make money. Anytime they are paying money on a claim, it means less money to their bottom line. They have literally hundreds of adjusters and hundreds of lawyers who are on their side trying to figure out how to prevent money from leaving their checkbooks. Quite frankly, you do need a lawyer to help you through this because your lawyer will make sure you’re properly compensated.

Cases settle before going to trial 80 to 90 percent of the time. However, that doesn’t mean there’s not a lot of work involved in getting a case settled outside of court. Sometimes you have to file a lawsuit and do a lot of what I call “legal maneuvering” to get a case settled. That means we take depositions from witnesses to the accident, from police officers, and from your doctors. But, yes, most cases will settle prior to trial.

We do get good results for our clients. We have settled hundreds, if not thousands, of cases where we’ve had large settlements. We’ve had substantial verdicts. We go to the mat for our clients if necessary. We’ll appeal cases. We’ll do whatever it takes to make sure our client is taken care of.

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Our Attorneys

Attorney Gordon Heuser | Heuser & Heuser | Colorado Springs

Gordon J. Heuser, Esq.

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As a Colorado Springs native, Gordon has been practicing in Southern Colorado for 35+ years.…

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Barkley D. Heuser, Esq.

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Barkley Heuser is a Colorado native, and has lived in Colorado Springs for over 59…

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Brennan Heuser | Personal Injury Attorney | Colorado Springs

Brennan D. Heuser, Esq.

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Brennan Heuser is a Colorado Native who graduated from the University of Miami, Fl with…

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