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Post Settlement Issues - Investment Advice

imageOnce the amount of compensation is known you will need specialist advice on how to protect your money for the future. A structured settlement is only available to Claimants who have received compensation awards. It is not available to the public in general. Your solicitor should always consider this on your behalf by recommending an independent financial advisor to consider your options regarding investment of your compensation.

What is a structured settlement?

In short, a structured settlement is similar to a pension. You pay part of the award to a life office (eg Standard Life) and purchase an annuity. In return, the Life office pays an income to you, usually on a quarterly basis.

Why is it so special?

You may be surprised to learn that a disabled person's income is taxed and this applies to any income which may be generated from an award of compensation. Income from a structured settlement is received tax free. Also, the payments can be linked to inflation so they rise each year with inflation. Lastly, the structured settlement payments are guaranteed to last for the Claimant's lifetime, however long that may be.

What are the disadvantages?

Once put in place, the structured settlement cannot be changed and some feel that this gives rise to a lack of flexibility. If the Claimant dies earlier than expected, the life office keeps the balance of the amount paid to them. The cost of care usually outstrips RPI and so there is a risk that the income from the structured settlement may not keep pace with carers' earnings. It is important to remember that the level of income from a structured settlement depends upon a Claimant's particular circumstances and so will vary in every case. There are many different types of structured settlement and one may suit your needs. However, the structured settlement must be implemented before the case concludes. You cannot go back later after the litigation has finished. The income from a structured settlement depends upon the market annuity rates at the time your quote is obtained. It is also dependent upon the life expectancy of the Claimant and the amount invested. Therefore, the quote needs to be obtained before a decision is made about whether a structured settlement is appropriate for you. Structured settlements do not suit everyone but most people still need some form of financial advice. Alexander Harris work with a vetted panel of independent financial advisors who provide recommendations for approval by the Court and Court of Protection, where appropriate. Each member of the panel has expertise in providing advice to Claimants and their families. We are not linked to these financial advisors financially or otherwise and have no interest in any investment options they may recommend.

Always consider other investment options

Each financial report is tailored to an individual's needs - no report is the same. We ensure that any independent financial advisor you instruct is fully aware of all your personal circumstances to prepare and investment portfolio that will meet your needs. Monies can be left under the control of the Court or Court of Protection for a patient. Alternatively, a private trust can be set up to give you more control. Even if you are considering what to do with your own money and you are not a patient with the Court of Protection, you will still be faced with some important decisions about your future and you may feel you need some specialist advice. We strongly recommend that you make decisions regarding your financial future based upon full and frank advice about the pitfalls and benefits of investing money. Initial enquiries and advice are provided without obligation.

For more legal information on military and catastrophic injury cases please contact Lesley Casey.

If you believe that you might have a legal claim relating to Post Settlement Issues - Investment Advice, please complete the online enquiry form or call 0870 024 0558. Your enquiry will be forwarded to a solicitor who specialises in Post Settlement Issues - Investment Advice.

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