What Is Settlement Planning?

Settlement planning is a financial strategy and process used to protect your award and promote long-term stability. Our advisors perform a needs assessment, evaluating your government benefit eligibility, medical expenses, housing, and additional future needs. From here, we create a personalized plan that balances immediate cash needs with future security so your settlement truly works for you.

What Is a Structured Settlement?

This is a financial arrangement that pays out a settlement award over time rather than in a single lump sum. This means you’ll earn a steady income while protecting government benefits to make the most of your settlement for years to come.

How Do Structured Settlement Annuities Work?

This is an insurance-backed contract that provides a fixed, stable source of income through tax-free payouts. Think of a structured settlement as the general tool, while an annuity is the specific mechanism that makes these protections possible.

This is a flexible solution and can be tailored to support a wide range of goals, including replacing lost income, funding college tuition, financing a home, supplementing retirement, or providing for beneficiaries. With careful planning, structured settlement annuities can also offer protection from creditors and bankruptcy, giving you financial security and stability.

Does the Entire Settlement Need to Be Structured?

No. Some cases do benefit from putting the full settlement amount into an annuity, but it’s not required. Many clients choose a mix, using some funds for immediate needs, like debts, medical expenses, or home modifications, while structuring the remainder for security later on.

Why Should I Consider a Structured Settlement?

Structured settlements help prevent your payout from being spent too quickly or affecting your eligibility for government benefits, like Medicaid or subsidized housing, which offers greater financial stability. Structured settlements provide a concrete way to handle your funds over time so you can plan for long-term goals like education, housing, ongoing medical care, and other future life events.

Are Structured Settlement Payments Tax-Free?

Yes. When properly structured, both the original settlement funds and growth earned from the annuity are paid out tax-free, unlike traditional investments.

Are Structured Settlements Guaranteed? Can I Name a Beneficiary?

Yes, payments are guaranteed once your settlement is established. You can choose lifetime monthly payments, a future lump sum, or a combination of both. You may also name beneficiaries, which guarantees future payments go directly to them, similar to an insurance policy.

Can Structured Settlements Be Used for Minors?

Yes, structured settlements for minors are encouraged. In these cases, a trust or custodial arrangement is devised to manage funds responsibly until the child reaches adulthood.

What Is a Settlement Trust or Settlement Protection Trust?

A settlement trust holds and protects settlement funds for the long term. Unlike a structured settlement or annuity, a settlement trust gives the trustee discretion to manage, invest, and distribute funds according to specific needs, such as upcoming expenses or legal requirements. This approach helps safeguard government benefits, provides oversight for large awards, and reduces the risk of your settlement being spent too quickly.

Can a Settlement Affect My Government Benefits?

Depending on the type of government benefit you receive, your settlement proceeds may be considered an asset, which can affect eligibility for needs-based programs. Common examples include:

• Medicaid
• Supplemental Security Income (SSI)
• Section 8 or other subsidized housing
• Food stamp programs
• Other needs-based assistance programs

Paramount helps plaintiffs navigate these challenges by structuring settlements in ways that protect and preserve access to essential benefits, such as through special needs trusts or other tailored strategies.

Are All Government Benefits Impacted By a Settlement?

No, only income- or needs-based benefits are affected. Those that are not needs-based, like Medicare and Social Security Disability, should not be impacted. However, if your settlement includes compensation for future medical expenses, Medicare may require a Medicare Set Aside to preserve future benefits and avoid liability. An MSA is a portion of your settlement specifically allocated to pay for future medical care related to your injury.

Can Structured Settlement Payments Be Deferred?

Yes. Payments can either start immediately or be pushed back for years or even decades. This flexibility means you can align payouts with major life events like retirement, a child entering college, or paying off a mortgage.

Who Manages My Structured Settlement?

Paramount works in tandem with your attorney and approved life insurance companies. We oversee the process from start to finish. Our advisors may suggest establishing a special needs trust or another advantageous way to structure your settlement that best serves your particular situation.

Do Structured Settlements Have Ongoing Fees?

No. Structured settlement annuities do not have annual fees like traditional investments. Advisor commissions are set by regulations and included in the annuity amount. Paramount does not charge a fee for initial planning sessions or long-term management of structured settlement arrangements.