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by Pyxl101
3952 days ago
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Structured settlements are not exclusively used for those reasons: > Structured settlement cases became more popular in the United States during the 1970s as an alternative to lump sum settlements. The increased popularity was due to several rulings by the IRS, an increase in personal injury awards, and higher interest rates. The IRS rulings changed policies such that if certain requirements were met then claimants could have federal income tax waived. Higher interest rates result in lower present values, hence annuity premiums, for deferred payments versus a lump sum. https://en.wikipedia.org/wiki/Structured_settlement They are presumably easier for the person paying the settlement as well. They can pay it from their cash flow over time, instead of liquidating businesses for up front payments, etc. It's possible that the article is drawing a false connection between the nature of the injury that the settlement is redressing, and structured settlements. It seems like people who are properly unable to care for themselves will require legal guardianship or conservatorship by another, and a trust set up on their behalf, etc. I don't get the impression that structured settlements alone are meant to deny the person who was awarded the settlement a right, so much as that they provide an advantage to one or both parties. |
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Well, in the 1970s, people had pensions and the 401(k) was a "thrift plan." Yet we've enacted all sorts of protections for the 401(k), because it is now the primary mechanism of retirement savings available to most Americans.
Structured settlements may have originated as a tax break in the 1970s. However, in the last 40 years they've become a way to provide a secure income stream for plaintiffs. We need to treat them as such.