Structured Settlements in the United States

The United States has enacted structured settlement laws and regulations at both federal and state levels. Federal structured settlement law include sections of the federal Internal Revenue Code (IRC). State structured settlement laws include structured settlement protection statutes and periodic payment of judgment statutes. Medicaid and Medicare laws and regulations affect structured settlements. To preserve a claimant's Medicare and Medicaid benefits, structured settlement payments may be incoporated into "Medicare Set Aside Arrangements" "Special Needs Trusts".

Structured settlements have been endorsed by many of the nation's largest disability rights organizations, including the American Association of People with Disabilities and the National Organization on Disability.

In April 2009, financial writer Suze Orman wrote in a column that structured settlements provide ongoing income and reduce the risk of blowing a lump sum through poor financial choices. In response to a reader's question, she added that financial security can be improved, she said "if you use the structured payouts wisely".

Structured Settlement

A structured settlements is a financial or insurance arrangement including periodic payments, that a claimant accepts to resolve a personal injury tort claim or to compromise a statutory periodic payment obligation. Structured settlements were first utilized in Canada and the United States during the 1970s as an alternative to lump sum settlements. Structured settlements are now part of the statutory tort law of several common law countries including Australia, Canada, England, and the United States. Although some uniformity exist, each of these countries has its own definitions, rules and standards for structured settlements.

Structured settlements may include income tax and spendthrift requirements as well as benefits. Structured settlements payments are sometimes called periodic payments. A structured settlement incorporated into a trial judgment is called a periodic payment judgment.