Lump Sum Settlement | Millennium Settlements | Tallahassee Florida Structured Settlements

Nation's Leading Provider of Structured Settlements for Plaintiffs

Millennium Settlements for Injured Parties

Millennium Settlements in Tallahassee Florida

Option 1: Lump Sum

A lump sum payment for personal physical injuries is not taxable. Compensation received for your physical injuries is considered a payment that makes you whole again and the IRS allows you to exclude these funds from your taxes. However, if you then invest the lump-sum payment, the interest you earn is fully taxable. There are factors to consider before choosing to receive your settlement in a lump-sum payment.

First, statistics show ninety percent of personal injury victims have nothing left of their lump sum settlement within five years of receiving their money. The chances of a settlement recipient successfully managing his or her proceeds is slim due to the demands of dealing with an abundance of financial planning advice, business prospects and loan requests from friends and family.

Lump-sum payments also create exposure to creditor claims, judgments, divorce decrees and predators. If you owe someone money, injure another person, get divorced or fall prey to a con artist, your lump sum settlement funds could be used to settle the claims.

Lastly, you will owe taxes at either your income tax rate or the capital gains rate on earnings the payment earns while invested, thus reducing your net rate of return. This rate of return will likely decrease further by money management fees.

Despite the drawbacks to lump-sum settlement payments, it may be appropriate to allocate a portion of your settlement to liquid investments. Doing so would provide you some liquidity and flexibility in your overall financial plan.

Millennium Settlements
3500 Financial Plaza, 4th Floor
Tallahassee, Florida 32312
(800) 573-8853 | (850) 894-4265 | (850) 894-4269 (fax)

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