If you or your loved one suffered traumatic brain injury (TBI), you may be entitled to compensation. Filing a lawsuit can help recover losses like medical expenses and lost earnings due to the inability to work. Similarly, you can seek damages for a catastrophic injury for non-quantifiable losses, covering pain and suffering and diminished quality of life.
After securing a settlement, you must choose between a structured settlement plan and a lump sum. A lump sum entails receiving the entire settlement amount at once.
However, getting a lump sum may not benefit a TBI victim. It is advantageous for brain injury victims to settle for a structured payment plan.
This piece will explain these two payment plans and their advantages:
The Nexus Between Structured Settlement and Lump Sum
Suppose you will obtain a $200,000 settlement from a personal injury matter. You can get the entire settlement at a go, which is the preferred option of several claimants.
However, a structured settlement entails periodic payments over a given duration of agreed amounts. It allows you to earn interest over the principal sum. After the original amount enters into a structured escrow and the disbursement begins, you will earn a combination of the principal and interest.
The remaining amount will continue to accrue, and every payment comes with principal and interest. Thus, the initial $200,000 in the escrow will eventually pay you more than that amount. The duration that the escrow or structure has to accrue interest will determine the overall amount.
You can customize these plans. Some structured settlements also entail a one-time payout, followed by periodic disbursements. Conversely, some payments last a lifetime, especially for young victims.
Although you may find getting a big check attractive and pleasing, a structured settlement that will last a given period is ideal for TBI victims.
Understanding the Relationship Between Traumatic Brain Injuries and Structured Settlements
Although any devastating harm can trigger lifelong damage, brain injuries distinctly affect the body. Medical experts diagnose over two million individuals with TBIs annually.
A TBI survivor may experience vision loss, struggle to communicate, and have issues with mobility. According to the Centers for Disease Control and Prevention (CDC), over half of TBI survivors cannot return to work five years after their harm due to cognitive issues. Similarly, one-third cannot complete daily activities unaided.
Severe brain injuries can trigger permanent health issues that will significantly reduce the victim’s living quality. TBIs can cause miscommunication between the brain and muscles, making it challenging for patients to move their limbs.
Some traumatic brain injuries cause hearing impairment or speech deficiency. Most TBI victims need rehabilitation and therapy. Also, they may need to rework their homes to make them ideal for walkers and wheelchairs. The recovery journey only begins when they discharge a TBI survivor from the hospital.
A structured settlement is the most suitable for TBI survivors due to the distinct challenges they face. If they receive a lump sum, there is a high probability they will spend it upfront. Such persons will struggle to shoulder medical and other costs along the line.
“A structured settlement guarantees continuous inflow, and you can segment it to cater to your medical treatment and needs,” says personal injury attorney Felix Gonzalez of Felix Gonzalez Accident and Injury Law Firm. Sticking to a structured settlement ensures even distribution of funds, as brain injuries are usually lifelong.
Structured settlements have numerous benefits. The Internal Revenue Service (IRS) will not tax it because the authorities do not regard it as income. You can also determine the payment schedule because they are customizable.
You can take some of the settlement at a go and demand the rest in a structured manner. You can even decide when to start getting settlement disbursements.
Furthermore, structured settlement annuities are safe from market fluctuations. The total amount you will eventually receive will be higher than the lump sum. Remember that interest would have accrued on the principal over time.
Determining the Ideal Settlement Type for You
Every brain injury is unique. You should consider different factors before deciding on the ideal settlement structure for you. It is advisable to engage your personal injury attorney in the decision-making process.
Choose a legal representative who understands the health and financial impact of a traumatic brain injury. Such professionals will commit themselves to helping you and work diligently to secure maximum compensation.
Furthermore, if you choose a structured settlement option, your lawyer must be able to liaise with experts to design a beneficial settlement system for you. They must prioritize your best interests throughout the process.
Also Read: How to Know if You Have a Valid Traumatic Brain Injury Claim
