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The History of Structured Settlements
The History of Structured Settlements
In today’s world, there are many individuals who have received structured settlements. These often come as the result of a lawsuit victory in a court case against a company or person who has done the recipient physical and personal harm. Structured settlements have an interesting history going back almost forty years.
Cebu,
VT,
United States
(pr4links.com)
18/10/2010
"Structured settlements have not in the past encompassed such arrangements as lottery payments. These have always been considered to be periodic payments that are made over a given period of time. "
In today’s world, there are many individuals who have received structured settlements. These often come as the result of a lawsuit victory in a court case against a company or person who has done the recipient physical and personal harm. Structured settlements have an interesting history going back almost forty years.
The definition of a structured settlement is an agreement that is negotiated through a tort action in order to yield payments over a given amount of time. These structured settlements commonly result from a court case process in which the one person was injured and the other party was mandated to pay them. These could result from worker’s compensation because of on the job injuries, personal injury, wrongful employee termination, property loss, or a wrongful death claim in which spouses and minor children are looking to obtain lost wage compensation and intangible support.
Structured settlements have not in the past encompassed such arrangements as lottery payments. These have always been considered to be periodic payments that are made over a given period of time. These types of awards feature less restrictions on how they may be cashed out, making it easier to convert such revenue streams to a single, lump sum payment amount.
The history of these structured settlements spans back to the 1970′s. In the United States, this is when a structured annuity settlement first happened. It was originally conceived of as a method for allowing recipients of lawsuits to receive their settlements in the form of lesser income per year. This proved to be helpful for such victims, since they would still qualify to get Medicaid and Medicare forms of aid. If instead, these recipients were given their cash all at once, then the individuals would have been required to pay all of their medical expenses using the money that they received. On top of this, they would not have been capable of getting other insurance subsequently. In the end, it was feared that the awarded monies would be consumed in medical bills as a result. This would then leave the victims back where they started, in having to apply once again to Medicaid or Medicare for help. Because of this, in such scenarios, the settlement requirements often entailed specially set up rules for trusts.
One of the problems with structured settlements is that although they are intended to provide income to the victims of injuries for their entire lives, in practice this does not prove to be the case. The reason for this is because of an important consideration that was left out of the calculations of those that conceived of structured settlements originally in the 1970′s. This is that inflation is a real and persistent enemy of such structured settlements. Over the years, and in particular over the decades, the recipients have discovered that inflation has ravaged their annual payment awards to the point that they are no longer sufficient to cover the costs of all of their many necessities. This is especially the case for award recipients who are younger, and who have many long years to receive their structured settlements.
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