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What is a Structured Settlement?A structured settlement is a financial or insurance arrangement,
including periodic payments, that a claimant accepts to resolve a personal injury tort claim or to compromise a statutory periodic
payment obligation. Structured settlements were first utilized in Canada and the United States during the 1970s as an alternative
to lump sum settlements. Structured settlements are now part of the statutory tort law of several common law countries including
Australia, Canada, England and the United States. Although some uniformity exists, each of these countries has its own definitions,
rules and standards for structured settlements. Structured settlements may include income tax and spendthrift requirements as well
as benefits. Structured settlement payments are sometimes called “periodic payments.” A structured settlement incorporated into a
trial judgment is called a “periodic payment judgment."
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Structured Settlements in The United StatesThe United States has enacted
structured settlement laws and regulations at both the federal and state levels. Federal structured settlement laws include sections
of the (federal) Internal Revenue Code. State structured settlement laws include structured settlement protection statutes and periodic
payment of judgment statutes. Medicaid and Medicare laws and regulations affect structured settlements. To preserve a claimant’s Medicare
and Medicaid benefits, structured settlement payments may be incorporated into “Medicare Set Aside Arrangements” “Special Needs Trusts."
Structured settlements have been endorsed by many of the nation's largest disability rights organizations, including the American
Association of People with Disabilities and the National Organization on Disability.
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