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Are Structured Settlements Beneficial to the Injured Child—both now, and in the future? Need legal assistance? Call Hurt, Crosbie and May in Lexington, Kentucky today.



Lexington Personal Injury | Kentucky Motor Vehicle Attorney |

In many substantial damages cases, the parties often agree to amicably resolve the case by structuring at least part of the settlement. One of the benefits of a structured settlement is that the periodic payments are tax-free. Section 104 (a) (2) of the Internal Revenue Code states that gross income does not include the amount of damages received, whether as lump sums or as periodic payments, on account of personal physical injuries or physical sickness. Under Revenue Ruling 79-220, the IRS emphasized that the exclusion applies when the beneficiary did not have the actual constructive receipt, or the economic benefit, of the lump sum that was invested to yield the monthly payment.

For the provision to be enforceable, money earmarked for the structure has to be paid directly to the life insurance company funding the annuity. All documents must be carefully drafted to prevent the application of constructive-receipt rules that negate the benefits of a structured settlement.

In the case of catastrophic injuries to a young child, periodic payments guaranteed for the life of the child, with cost of living adjustments, are a critical element of any settlement designed to provide cash to pay for future care. Hurt, Crosbie and May attorneys work with financial planners to develop a payment schedule tailored to fit the child's needs, with payments made in either monthly or yearly installments. This schedule may also include periodic distributions of future lump sum payments at designated intervals. Further, payments can be made for life or they can be guaranteed for a specific duration, such as 20 or 30 years.

In addition to the family's attorney ensuring that the settlement provides for the long-term needs of the disabled child, the importance of providing a safe home environment and immediate care cannot be overlooked. These are important issues that will contribute to the betterment of the child's quality of life as well as life expectancy.




Hurt, Crosbie & May serves clients in Kentucky, including the following areas:
Cities: Lexington, Nicholasville, Georgetown, Richmond, Winchester, Louisville, Frankfort, Lawrenceburg, Cynthiana, Mt. Sterling, Versailles, Paris, Stanton, Harrodsburg, Clay City, Wilmore, Berea.

Counties: Fayette, Jessamine, Scott, Jefferson, Madison, Franklin, Woodford, Shelby, Anderson, Clark, Mercer, Powell, Garrard, Bourbon, Montgomery, Spencer, Estill.

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