Traditional structured settlements are widely endorsed by the nation’s top attorneys, disability advocacy groups, claims professionals, and policymakers—and for good reason. With cash flows that are 100% income tax-free and tailored to individual needs, structured settlements have been securing financial futures for over 40 years.
Yet many of these same advocates who encourage structured settlements for personal physical injury claims are completely unaware of the substantial tax savings available when structuring personal non-physical injury settlements.
Why Cash Settlements Can Be So Costly
When taxable claims settle for cash, 100% of the settlement is received—and taxed—in a single year. Even a moderate settlement can push you into a higher marginal tax bracket, resulting in an unnecessarily large portion of your recovery going to taxes.
Combined federal, state, local, and Alternative Minimum Tax (AMT) rates can exceed 50% in some cases, dramatically reducing your net recovery.
It doesn’t have to be this way.
The Solution: Non-Physical Injury Structured Settlements
By choosing to structure your taxable settlement before finalizing negotiations, you can defer highly taxed income into future years when your tax bracket may be lower, maximizing tax efficiency and your net recovery.
Benefits of structuring your taxable settlement:
- Tax-deferred growth – Your deferred settlement earns pre-tax interest, increasing the total value of your recovery
- Lower overall tax burden – Spread income across multiple years to avoid pushing yourself into higher tax brackets and keep more of your settlement
- Strategic planning – Create tax-advantaged income streams for retirement, major purchases, living expenses, or education costs
- Predictable cash flow – Design payment schedules that align with your financial goals and future needs
We’ve created a comprehensive educational webinar designed to help you better understand the many benefits of this valuable settlement option: Structuring Your Taxable Damages Webinar
When to Choose a Non-Physical Injury Structured Settlement
With few exceptions, you can benefit from structuring almost any taxable settlement arising from a legal dispute, including:
Wrongful Termination ◦ Discrimination ◦ Civil Rights Violations ◦ Punitive Damages ◦ Bad Faith ◦ Harassment ◦ Breach of Contract ◦ Intellectual Property Infringement ◦ Retaliation ◦ Defamation ◦ Business Disputes ◦ Emotional Distress ◦ And Many Others
Contact Dan Finn Today
If you or a client is negotiating a non-physical injury claim, don’t wait until the settlement is finalized. Contact Finn Financial Group now to discover how we can help you maximize your after-tax recovery.
Phone: 800.531.7466
E-Mail: Dan@FinnFinancialGroup.com
CA Insurance License: 0A96173
The information provided on this website is educational in nature and should not be construed as tax, legal, investment, or accounting advice. Tax laws are complex and subject to change. Please consult with your own independent tax, legal, and financial professionals before making financial decisions.