Legal term
Structured Settlement
Updated Jul 19, 20262 sources
In a sentence
A settlement paid as a stream of future payments through an annuity instead of one lump sum. For physical-injury claims the payments are entirely income-tax-free — including the growth.
Under IRC sections 104 and 130, personal-injury settlement payments structured through a qualified assignment are tax-free to the claimant.
Structures protect long-term needs but create a secondary risk: factoring companies offering 'cash now' for your future payments at steep discounts. Forty-nine states require court approval before those transfers — see settlement factoring.
