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August 31 - Newsblog #1
Your Injury Attorneys in the News: Homeowner and Wife Sue over Police Shooting
September 7 - Newsblog #2
Your Injury Attorneys in the News: Homeowner’s Possession of Handgun Legal Under 2nd Amendment
September 14 - Newsblog #3
Your Injury Attorneys in the News: if a Government or Government Agency is at Fault, You Can Sue
September 21 - Newsblog #4
Your Injury Attorneys in the News: Lawsuit Against Police Department Invokes the Civil Rights Act
September 28 - Newsblog #5
Your Injury Attorneys in the News: a Clear Line from the Action – or Inaction – to the Injury
October 12 - Newsblog #6
Your Injury Attorneys in the News: Police Insensitivity Turns Traffic Stop into a Travesty
October 19 - Newsblog #7
Your Injury Attorneys in the News: Police Who Abuse Power Must Be Held Accountable, Law Professor States
October 26 - Newsblog #8
Your Injury Attorneys in the News: Holding Overly Aggressive Police Accountable
November 2 - Newsblog #9
Your Injury Attorneys in the News: Brown Vs. Impd Case About Much More Than Punishment or Money
November 9 - Newsblog #10
Your Injury Attorneys in the News: Improper Medical Diagnosis and Care Resulted in Loss of an Eye
November 16 - Newsblog #11
Your Injury Attorneys in the News: Medical Malpractice Claims Have a Front End and a Back End
November 30 - Newsblog #12
Your Injury Attorneys in the News: Truths About Medical Malpractice
December 7 - Newsblog #13
Your Injury Attorneys in the News: Yes, You Can Sue City Hall
December 14 - Newsblog #14
Your Injury Attorneys in the News: Slip and Fall Changes Two Lives Forever
December 28 - Newsblog #15
In the News: Ramey & Hailey Year in Review
January 4 - Newsblog #16
In the News: Teen’s Sexual Abuse Case Calls Attention to the Problem
January 11 - Newsblog #17
In the News: Parents of Survivor Sue Parents of Shooter
January 18 - Newsblog #18
In the News: Erin Brockovich Teams Up with Indiana Moms
January 25 - Newsblog #19
Your Injury Attorneys in the News: Case Settled in Favor of Catastrophic Slip and Fall Injury Victim
January 31 - Newsblog #20
In the News: Wrongful Death Lawsuit Filed Against Rehab Facility
February 8 - Newsblog #21
In the News: Nurse Arrested in Sexual Abuse Case
February 15 - Newsblog #22
In the News: Running the Clock on Indiana Medical Malpractice
February 22 - Newsblog #23
In the News: to Repeal or Not to Repeal – Indiana Legislators Rule “not”
March 1 - Newsblog #24
In the News: Helping Physicians Keep Helping
March 8 - Newsblog #25
In the News: Parents of Brain-damaged Infant Sue Hospital
March 15 - Newsblog #26
In the News: Owner of Gun Wins Decision
March 22 - Newsblog #27
In the News: Indiana House Passes Long Term Care Protections Bill
April 5 - Newsblog #28
In the News: Slip-and-fall Victim Wins Right to Sue Dollar Tree
April 12 - Newsblog #29
In the News: Inspection Report Shows Vets Harmed at 52 Nursing Homes
April 19 - Newsblog #30
In the News: Sandwich Diversion Causes Fatal Two-semitrailer Crash
April 26 - Newsblog #31
In the News: Does Premises Liability Cover Goose Attacks?
May 10 - Newsblog #32
Two-week-old N.y. Verdict Offers Takeaways for Slip and Fall Victims
May 17 - Newsblog #33
In the News: Barrel Blast Triggers Wrongful Death Lawsuit
May 24 - Newsblog #34
In the News: when a Product Manufacturer is Not at Fault
May 31 - Newsblog #35
In the News – College Doc’s Sexual Abuse of Students Coming to Light
June 7 - Newsblog #36
In the News – One Week, Four Motorcycle Accidents
June 14 - Newsblog #37
List of Troubled Nursing Homes Released
June 21 - Newsblog #38
In the News: Kansas No-caps Ruling Changes Personal Injury Climate
June 28 - Newsblog #39
In the News: Jury Awards $10.5 Million for Pain and Suffering in Birth Injury Case
July 5 - Newsblog #40
In the News: More Indicted in Last Year’s Duck Boat Tragedy
July 17 - Newsblog #41
In the News: Richard Hailey on Litigation Team for Lawsuit Vs. Tesla
July 24 - Newsblog #42
In the News: Malpractice Lawsuit Yields Largest Award in History
August 28 - Newsblog #43
In the News: Trucks V. Passenger Cars – Score 18:116. Everybody Loses

Medical Malpractice Newsletter

An Overview of Structured Settlements

There are numerous legal situations in which a person may receive a large sum of money through a court award or settlement. Often arising as compensation for personal injuries or other acts, most such payouts are reduced due to some or all of the following costs often associated with legal action:

  • Attorneys’ fees and costs advanced
  • Medical and related costs incurred but not paid
  • Medical and related costs paid by the injured party’s own insurance carrier, which must be repaid out of the award (especially if there is a medical lien in place)

Structured Settlements

After all deductions have been made from the award or settlement, the remaining amount may be paid in one lump sum. Injured parties (and their attorneys), however, may also choose a “structured settlement,” i.e., where the settlement is paid out in specified increments over a set period of time.

Structured settlements are often favored by attorneys and insurance companies (who typically actually pay the award or settlement). The reasoning and rationales behind structured settlements include:

  • Protection against the injured party spending the award too quickly (it is estimated that most lump-sum awards are exhausted within five years)
  • When the injuries are catastrophic, the award may be large, and must satisfy the needs for income and medical care in the future
  • Many courts are unwilling to allow parents to manage awards in behalf of minors, for fear that they may spend it
  • A structured settlement may avoid the costs associated with the filing and prosecution of a lawsuit

Procedure for Structured Settlements

A structured settlement may be applied to all or any portion of an award. Although procedures and laws governing such settlements vary from state to state, common elements often include:

  • Negotiations – In order to determine the amount and duration of needed periodic payments, financial planners or other experts are sometimes consulted.
  • Determination of award amount – There must be a determination regarding the available amount for periodic payments. This calculation may include setting aside amounts needed for attorneys’ fees, costs, payment of outstanding medical fees, medical needs in the near future, lump sum needed by the injured party, and possibly other items.
  • Annuity Contract – Parties must select and negotiate an “annuity contract” to fund the periodic payments. Annuity contracts are offered by some insurance companies, and may entail one lump-sum payment for a guaranteed stream of payments for a specified time or even for the life of the recipient. Payments may start immediately or sometime in the future.
  • Drafting of the agreement – Some jurisdictions require court approval for the finalized structured settlement agreement.

Tax Benefit of Structured Settlements

Besides guaranteeing a stream of income for a specified period or for life, there also may be federal tax advantages to a structured settlement. The Internal Revenue Code (IRC) allows an injured taxpayer to exclude from taxable income monies received for physical injuries or sickness, whether from an award in a lawsuit or a negotiated settlement. The Federal Periodic Payment Settlement Act of 1982 amended the IRC, expanding the injured taxpayer’s benefits to allow the exclusion from income of all periodic payments in a structured settlement.

Annuity payments are based upon various factors, including how long the recipient is likely to live. The injured party may live longer and end up receiving substantially more than the original award or settlement, but the excess may also be tax free, providing the injured party never had receipt of the funds used to buy the annuity and has no ownership rights in it.

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