Common Settlement Provisions in Structured Settlement for Personal Injury Claim
When structuring a settlement agreement after a car crash, several key provisions are typically included to ensure that the settlement is comprehensive and meets the needs of the claimant. Here are some common provisions found in such agreements:
1. Payment Schedule
Description: This provision outlines the specific timing and amounts of payments that the claimant will receive. It includes details on whether the payments are monthly, quarterly, annually, or at other intervals.
Example: The agreement specifies that the claimant will receive $2,000 per month for the next 20 years.
2. Lump Sum Payments
Description: This provision includes any agreed-upon lump sum payments that are part of the settlement. These payments are typically made at the beginning of the settlement period or at specified intervals for significant expenses.
Example: The claimant will receive an initial lump sum payment of $50,000 to cover immediate medical expenses, followed by a lump sum of $25,000 every five years.
3. Indexed Payments
Description: This provision ensures that the payments are adjusted for inflation or other indices to maintain their purchasing power over time.
Example: Payments will increase by 3% annually to account for inflation, ensuring that the claimant's financial needs are met despite rising costs.
4. Life-Contingent Payments
Description: This provision specifies that payments will continue for the life of the claimant, providing long-term financial security.
Example: The claimant will receive $3,000 per month for as long as they live, with payments ceasing upon their death.
5. Beneficiary Designations
Description: This provision designates beneficiaries who will continue to receive payments if the claimant passes away before the settlement term ends.
Example: If the claimant passes away, the monthly payments will continue to their spouse and children until the end of the original settlement period.
6. Medical Expense Coverage
Description: This provision details how the settlement funds will be used to cover current and future medical expenses related to the accident.
Example: A portion of the structured settlement is allocated specifically for ongoing medical treatments and rehabilitation costs.
7. Future Care Needs
Description: This provision addresses anticipated future care needs and includes payments to cover long-term care, home modifications, or other necessary support.
Example: The settlement includes provisions for $1,000 per month to be used for home healthcare services as the claimant's condition progresses.
8. Tax Considerations
Description: This provision ensures that the structured settlement complies with applicable tax laws and clarifies the tax implications of the payments.
Example: The settlement confirms that all periodic payments are tax-free, providing clarity and peace of mind for the claimant.
9. Dispute Resolution
Description: This provision outlines the process for resolving any disputes that may arise regarding the settlement agreement. It may include mediation or arbitration clauses.
Example: Any disputes arising from this agreement will be resolved through binding arbitration, with both parties agreeing to the terms outlined in the arbitration clause.
10. Legal and Administrative Fees
Description: This provision details any legal or administrative fees associated with setting up and maintaining the structured settlement.
Example: The agreement specifies that all administrative costs related to managing the structured settlement will be covered by the at-fault party's insurance company.
11. Compliance and Reporting
Description: This provision outlines the requirements for compliance with the settlement terms and any necessary reporting to relevant authorities or parties.
Example: The claimant must submit annual reports detailing the use of the settlement funds to ensure compliance with the terms of the agreement.
12. Review and Modification
Description: This provision allows for periodic review and potential modification of the settlement terms to address changing circumstances or needs.
Example: The settlement includes a clause allowing for a review of payment amounts and schedules every five years to ensure they continue to meet the claimant's needs.
Conclusion
Including these common provisions in a structured settlement agreement after a car crash ensures that the settlement is comprehensive and addresses the claimant's immediate and long-term needs. By carefully considering and negotiating these provisions, claimants can secure financial stability and peace of mind as they recover from their injuries.