Structured Settlement

Structured settlement is a financial arrangement, a claimant accepts to resolve a personal injury tort claim or to compromise a statutory periodic payment obligation. Structured settlement was first utilized in Canada after a settlement for children affected by Thalidomide. The increased popularity was also due to rulings by the IRS and an increase in personal injuryawards. The IRS rulings changed policies such as if the requirements were met then claimants could have federal income tax waived.

Structured settlements have become part of the statutory tort law of different common law countries containing Australia, Canada, England and the United States. Structured settlement may include spendthrift requirements as well as benefits and are considered to be an asset-backed security.

Structured settlement payments are called periodic payments and when incorporated into a trial judgment are called a “periodic payment judgment" payments. These payments are called coupon for a regular bond.