How To Decide If A Structured Settlement Is Right For Your Lottery Winnings

By: Jimmy Wilson
Submitted: 2007-01-17 16:17:14
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A structured settlement is a financial tool used in the settlement of personal injury or windfall cases. In a structured settlement, the parties negotiate the payment of damages or winnings to the affected parties be made over a period of years, rather than in one lump sum. These periodic payments are typically funded by an annuity policy.Once the case is settled and the parties have agreed to a structured settlement, an annuity policy is purchased to provide periodic payments.There is a Federal law that permits the sale of structured settlement payments.

In the case of lottery winnings that you have chosen to accept over an annuity payment terms can look like the best solution to your windfall, but after making this decision you could find yourself wishing you had taken the lump sum.

Predicting the future needs that arise are as uncertain as finding yourself on the winning side of the lottery. Not to be discouraged by how to deal with your financial future, there are alternatives after you've made your decision to accept payments over a long period of time.

Structured settlements is a solution that often resolves immediate needs of releasing funds due you but at a much faster pace. Granted there are penalties for opting for a cash settlement. At the point you have decided to capture your net payment into a single reduced total amount, you have entered into another decision that is worth considering carefully.

Structured settlements are like a stock option or a savings bond, in that the sooner you opt to cash out the lesser the amount you receive. Not only can you act too quickly but this is a negotiated price. Don't act too hasty here, it will finalize your payments forever.

There are a number of structured settlement companies that will gladly seek your business. After all look at what they stand to gain. Would you, if you had the capital, buy one million dollars for a reduced rate of $500,000, and all you had to do was accept the one million dollars paid over let's say 15 years? Of course you would. How hard is it to do if buying money with a 50 percent return was assured?

The key to making the best decision on who to do business with, is to consider the fact, you hold all the negotiating clout in this situation. You have the absolute best assets in the world, cash, and who is willing to pay you the most, immediately, for it.

In choosing the right structured settlement, investigate each company by asking to refer some of their clients for your opportunity to discuss if they felt they got the best deal and by what process did they choose a particular structured settlement firm. This will make you feel much more at ease, in making your most important decisions about liquidating your assets.

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