What is the difference between a structured settlement and a lump-sum settlement?

In Washington, structured settlement and lump-sum settlements are both forms of settlement in personal injury law. Both are similar in the sense that the victim is rewarded with a one-time financial award. A structured settlement is the more common form of settlement. It is a form of payment that is paid out in multiple installments, spread out over a certain period of time. It allows for the victim to receive a steady stream of income to support themselves, and it is usually tax-free. A lump-sum settlement is a one-time, single payment. It is typically a larger amount than the structured settlement, but the victim will receive the full amount at once. This allows for the victim to be paid for their damages in one payment, instead of multiple installments. However, the lump-sum settlement is not tax-free, and the victim will need to pay taxes on the amount. In summary, the key difference between a structured settlement and a lump-sum settlement is that with a structured settlement, the victim will receive multiple payments over a certain period of time, and the payments are tax-free. With a lump-sum settlement, the victim will receive a single payment and the amount is taxable.

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What is the difference between a structured settlement and a lump-sum settlement?

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