After receiving a Lump Sum Settlement Receiving a lump sum settlement will usually result in a major life change for the recipient. However, a person shouldn't immediately get caught up in the first figure of the settlement. After the attorney's share and any taxes that apply, the figure may be reduced by one-third to one-half in net payment actually received and held onto. After medical bills, outstanding debts incurred while waiting, and the figure could end even less still. When the remaining amount is actually received, the best decision to make is usually to just leave the money in a bank account for a bit. Instead of running out and spending it right away, the recipient would be better served planning out how it can actually be of benefit over the long-term. Unfortunately, most folks who receive lump sum settlements don't follow this advice. The vast majority of them spend all their funds within five years. After the money is gone, permanent injuries and disabilities still remain, so properly managing your money is very important, and should be done with the advice of a processional financial advisor. Lump sum settlements serve a purpose in the legal world when it comes to paying off damages, but it's not likely recipients of large amounts will see them. For a payer, a structured settlement reduces annual costs and tends to be the smarter way to go financially. However, for those who do receive such settlements, they must sign away and release any further claims. While the settlement may not represent the full amount claimed for an injury, it can represent ready cash that can be immediately obtained. In this regard, lump sum settlements can be attractive and useful. Otherwise, is is often best to forego the attraction of the large payout, and keep receiving payments as scheduled, unless you have a very good reason for doing so. Always discuss any plans with a CPA or financial planner before making a decision that could have such a large affect on you finances, because once you accept the payout, there’s usually no way to reverse it. After you receive a Settlement Before you grab that fast cash, learn what’s involved with Lump Sum Settlements