Structured settlements may provide financial security, particularly with an injury to a minor.
A structured settlement provides an option for periodic payments, rather than a lump sum payment where you receive the full amount. Structures are utilized within personal injury claims on occasion and are more commonly used when there is an injury to a minor.
Structured settlements are governed by Minnesota Statutes (MN Stat §549.30). In a structured settlement, the Plaintiff agrees to resolve a personal injury claim by receiving part or all of the settlement in the form of periodic payments, on an agreed schedule, rather than in a lump sum.
The periodic payments are generally funded through the purchase of one or more annuities.
In connection with minors, a structured settlement can be purchased to make guaranteed periodic payments into the future. If a structured settlement meets the requirements of the federal tax code, interest/growth on the structure may be non-taxable to the recipient.
The requirements for a structured settlement are very stringent in connection with minor settlements. In an effort to protect minor settlements, the courts require the company issuing the annuity or structure to have an extremely high financial rating, be licensed in the state of Minnesota, and comply with Minnesota Statutes.
A structured settlement may be something to consider in connection with a minor’s personal injury claim.
This webpage contains general information and not legal advice, nor is it an exhaustive representation of its subject matter. It is based on Minnesota law in effect at the time of writing. An attorney at Farrish Johnson can advise you about how the law applies to your specific situation.