A structured settlement is an agreement, a party loses suit for personal injury (actual originator is usually an insurance company) is in agreement, the decision on the winner, with payments over a period of time, instead of a lump-sum payment. This CAD if future revenue sold to a third party in exchange for a lump sum. The typical procedure is as follows (the details may vary depending on the State).
- the seller must documentation, including information on insurance companies that send the amount of the solution and the timetable for payment of the potential buyer.
- the potential buyer makes a purchase, offer.
- the seller sends (if the person concerned) the potential buyer of a copy of its institutional agreement and settlement policy structured.
- the seller and the buyer or taught, describes a proposed settlement agreement. the seller and buyer presentation with a request to the Court of origin for approval.the Court must review the documentation and approve the sale, unless the transaction determines the best interests of the seller for the Court.
The entire process takes a couple of weeks.
A point to remember is that the price of one structured settlement less than the total value of payments received. Time is money, and a lump sum is payments becoming more over time, because a dollar today almost always valued a dollar tomorrow. It is important to know what it means to get “time value of money” at a reasonable price. This calculation is mathematically more precise than we think, and there are guidelines on the matter. Unless you’re a mathematician or an insurance actuary, would be a good idea seeking professional help for that purpose.