What Is a Structured Settlement and Is It Right for Me?
If you’ve been injured in an accident, you may have heard the term “structured settlement” while your personal injury case is being resolved. For many people, especially those unfamiliar with the legal process, this can be confusing.
At The Law Offices of Albert Zafonte, we believe clients should understand their options before making long-term financial decisions. This post explains what a structured settlement is, how it works under New York personal injury law, and whether it may be right for you.
What Is a Structured Settlement Under New York Law?
A structured settlement is a way of receiving compensation from a New York personal injury settlement over time instead of in a one lump-sum payment (receiving all of the payment from your settlement at one time).
Rather than receiving all compensation at once, payments are made on a schedule that may include:
Monthly payments
Annual payments
Lump payments at specific future dates
In New York personal injury cases, structured settlements are commonly used in serious injury, construction accident, wrongful death, and motor vehicle accident claims, particularly when long-term care or future expenses are anticipated.
How Does a Structured Settlement Work in New York?
After a personal injury claim is resolved — either through negotiation or litigation in New York courts — the parties may agree to structure part or all of the settlement.
Here’s how it typically works:
A settlement amount is negotiated under New York law
Funds are used to purchase an annuity from a qualified insurance company
The annuity provides guaranteed payments over time
Once finalized, New York structured settlement agreements are generally permanent. This is why legal guidance is essential before you consider accepting one.
Benefits of a Structured Settlement for New York Injury Victims
Structured settlements can be especially helpful for accident victims in New York, where the cost of living, medical care, and long-term rehabilitation can be high.
✅ Long-Term Financial Security
Regular payments can help cover:
Ongoing medical treatment
Physical therapy or rehabilitation
Lost future income
✅ Favorable Tax Treatment
In most New York personal injury cases, structured settlement payments are not subject to federal or New York State income tax, which can preserve more of your compensation.
✅ Financial Protection
Spreading payments over time can reduce the risk of spending a large settlement too quickly — a common concern for injury victims adjusting to life after an accident.
✅ Tailored to Future Needs
Structured settlements can be designed to align with expected expenses, such as future surgeries, in-home care, or long-term disability needs.
Potential Downsides to Consider
Structured settlements are not the right choice for everyone. The following are some downsides to moving forward with a structured settlement:
⚠️ Limited Access to Funds
Once established, you generally cannot withdraw money early, even if your circumstances change.
⚠️ Immediate Expenses
If you have pressing needs — such as unpaid medical bills or lost wages — a lump-sum payment may offer more flexibility.
⚠️ Not Necessary for All Cases
Some New York personal injury claims involving short-term injuries are better resolved with immediate compensation.
Structured Settlement vs. Lump-Sum Settlement in New York
In many New York cases, attorneys negotiate a combination approach, allowing injured clients to receive immediate funds while structuring the remaining compensation.
Is a Structured Settlement Right for My New York Personal Injury Case?
A structured settlement may be a good option if:
Your injuries require long-term medical care
You were involved in a serious car accident or construction accident in New York
You want predictable income over time
You are concerned about managing a large settlement at once
It may not be ideal if:
You need immediate funds for urgent expenses
Your injuries have fully healed
You prefer full control over your settlement funds
Why Working With a New York Personal Injury Lawyer Matters
Insurance companies often promote structured settlements because they protect their financial interests — not necessarily yours.
An experienced New York personal injury attorney can:
Explain settlement options in plain language
Evaluate your long-term financial and medical needs
Ensure any structured settlement complies with New York law
Negotiate terms that truly protect your future
Final Thoughts
A structured settlement can be a valuable tool for New York injury victims — but only when it aligns with your specific needs and circumstances. Understanding how structured settlements work is an important step in protecting your financial future after an accident.
If you have questions about structured settlements or a personal injury claim in New York, speaking with a knowledgeable attorney can help you make an informed decision. At the Law Offices of Albert Zafonte Jr. & Associates, we prioritize making sure our clients are thoroughly knowledgeable about their options and are offered the best solution for their unique case. Contact us for a consultation today!