Q
What is a structured settlement in a child's Virginia personal injury case?

A
Compensation for a personal injury case often comes in the form of a lump sum received shortly after a settlement or verdict is reached. In children's cases, however, the money cannot be given to the children until they are 18 years old. The court that approves the settlement (see 9 Ways in Which Your Child's Virginia Injury Law Case is Different from an Adult Virginia Injury Law Case) has money paid into the court where it is placed in a bank account until the child's 18th birthday. The money will earn interest but only at the lower savings account rate.

A great alternative is a structured settlement. This method takes the money the insurance company would pay to the injured party and has the insurance carrier purchase an annuity in the injured person's name, in this case a child. The annuity pays more interest than the savings account. It also allows more flexibility then just turning the money over to the child at their eighteenth birthday. For example, the payments could be set in four equal installments to help pay for college for the child at age 18, 19, 20 and 21. If the child needs lifetime care, it could pay her monthly for a set number of years.

Studies have shown that structured settlements do protect a child's money from outside abuse. Structured settlements must be approved by the courts and are typically seen as one of the best options for protecting award money in a Virginia Child's personal injury case.

This blog has more great information about structured settlements!

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