US Structures, ctd.

Main reasons for use:

1) tax advantages: tax free (same as UK)

- win/win situation, insurer and claimant
usually notionally divide the savings

2) Risk of dissipation:

- 25-30% of accident victims dissipate lump-
sums within 2 months

- 90% spend it all in 5 years (Source: California
Practice Guide: Personal Injury, Rutter Group, Chapter 4)