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