In 2019, my younger brother, Marcus, was in a car accident.
He wasn’t at fault. The other driver had run a red light and T-boned his car at full speed. Marcus survived, but his leg was badly fractured, and he couldn’t walk properly for nearly a year. The months that followed were filled with pain, rehab, and lawyer meetings.
Eventually, he won the case and was awarded a $300,000 settlement. We were relieved—until we were faced with a decision that no one had prepared us for:
> Should Marcus take the money as a structured settlement or a lump sum?
At the time, it seemed simple. Why wait 10 or 20 years for something you could have today?
So he took the lump sum—about $190,000 after lawyer fees and deductions.
It changed his life. But not entirely for the better.
What Is a Structured Settlement?
A structured settlement is when a legal settlement—typically from a personal injury case—is paid out in regular installments over time, rather than all at once.
It’s often designed like an annuity:
Monthly, quarterly, or yearly payments
Can include lump sums at specific intervals
Tax-free if related to personal injury cases
Customizable based on needs (education, healthcare, retirement)
These settlements are usually funded by annuities from insurance companies and guaranteed over a fixed period—or for life.
Why Structured Settlements Are Offered
Courts often prefer structured settlements for:
Young recipients (to prevent waste)
People with long-term medical needs
Those unable to manage large sums
Ensuring stability and future care
They offer security, predictability, and protection—especially in emotionally or physically vulnerable times.
But that’s not always how they feel.
Why Marcus Chose a Lump Sum (And Why Many Do)
At 27, Marcus didn’t want to wait. He had medical bills, lost income, and dreams of starting a small business. Waiting 10 or 20 years for a payout felt like delayed justice.
Here’s what swayed him:
💸 Immediate access to funds
🧾 Control over how to spend/invest
⏳ Avoiding the “slow drip” of monthly checks
💼 Freedom to launch a new career path
He bought a decent used car. Paid off some debts. Invested a chunk. Took a trip with friends. Life finally felt free again.
But freedom without structure… is risky.
The Hidden Costs of Choosing Lump Sum
Within two years, most of the money was gone.
Not because of lavish spending—but because life happened:
His startup failed during COVID
Unexpected medical expenses returned
Stock investments didn’t perform
He didn’t consult a financial advisor
Emotional burnout led to impulsive spending
He told me once, quietly,
> “I thought I needed money. What I really needed… was a plan.”
That’s when I realized: Structured settlements aren’t slow. They’re steady. And sometimes, that’s exactly what trauma survivors need.
Structured Settlement vs Lump Sum: A Real Comparison
Feature Structured Settlement Lump Sum
Stability ✅ Guaranteed income over years ❌ One-time payout, no backup
Tax Benefits ✅ Tax-free (personal injury) ✅ Also tax-free (if injury-based)
Flexibility ❌ Fixed schedule ✅ Complete freedom
Risk of Misuse ❌ Very low ✅ Very high
Access to Emergency Funds ❌ Limited unless sold ✅ Immediate
Emotional Impact ✅ Encourages discipline ❌ Can lead to regret
Can You Sell a Structured Settlement Later?
Yes, you can sell future payments for a lump sum through factoring companies. But it comes with:
Court approval
Loss of total value (companies take a cut)
Legal and processing fees
Emotional stress during negotiation
Many people only sell their structured settlement if they have no other option.
What My Brother Learned (and Now Tells Others)
After losing most of the money, Marcus didn’t spiral—but he did reflect.
He started a blog for accident survivors. He volunteers now, helping people understand legal and financial rights post-settlement. And he tells every injured person who reaches out:
> “Don’t think like a lottery winner. Think like someone rebuilding a life.”
So… Should You Choose a Structured Settlement?
Ask yourself:
Can I manage a large sum responsibly?
Do I have a plan or advisor in place?
Do I have ongoing medical or care needs?
Am I emotionally ready to make big financial decisions?
Do I trust myself in moments of stress or impulse?
If the answer to any of those is “no” or “I don’t know,” a structured settlement may be the safer, smarter path.
Final Thoughts
Money isn’t just about power. It’s about protection. And sometimes, the slower road is the one that gets you home safely.
My brother didn’t fail. He just didn’t have guidance.
Now he shares his story so that others won’t fall into the same trap—because sometimes, the hardest thing to do is wait… but it’s also the wisest.
If you’re faced with this choice, breathe. Get advice. And remember:
> It’s not about how fast you get the money.
It’s about how long it lasts when you do.