Structured Settlement Annuity Terminology in Spanish

Image of rich blonde walking toward private airplane with shopping bags while crew waits, shown on Structured Settlement Annuity Terminology in Spanish post.

Structured Settlement, Structured Annuity, Structured Settlement, Structured Settlement, Structured Payments?

So many names to refer to basically the same thing. In English, a Structured Settlement is a defined set of payments issued to the victim of a lawsuit case in the form of an annuity. These types of annuities are called Single Premium Immediate Annuities (SPIA). These payments may be monthly, quarterly, annually, or issued as periodic lump sum payments; the most common being monthly and lump sum. Some of these annuities include a Cost-of-Living Adjustment or COLA ranging from 2 to 5% per year with 3% being the most common. The payout term for these annuities is typically 20 to 30 years, however, many annuities also offer a life contingent continuation of the initial guaranteed term. The accord between opposing parties in a lawsuit that concludes the litigation is called the Release and Settlement Agreement, sometimes referred to as the Settlement Agreement and Release. If a victim was a minor, it may be called a Minor's Compromise.

Annuity Payout Example

A typical monthly annuity payout may read as "240 monthly payments of $2,000 with a 3% annual increase, beginning on June 1, 2025, through and including May 1, 2045, and life thereafter." The life thereafter portion of that annuity description would indicate that the annuitant is entitled to guaranteed payments through May 1, of 2045 and will continue to receive the monthly payments until they pass away. If they were to pass away before the guaranteed period ends, the annuity would continue to be paid out to whomever they chose as beneficiary on the original annuity contract until the last guaranteed payment date. In the example above, that day would be May 1, 2045.

What did you say? You have a what? What is that dude?

Most other countries, especially Spanish speaking countries, are not familiar with structured settlements. They simply don't exist. Heck, they're hardly familiar with lawsuits. It's just not part of their culture. Sure, lawsuits exist but it's not rampant as it is in the United States. Their TV isn't constantly blasting personal injury and class action ads every other minute. First off, it's very uncommon in other countries to think about suing a place of business for what may be considered frivolous reasons. Almost certainly, if you slip and fall in some store overseas, you're not going to walk away with a big settlement. "You slipped; you fell. That's on you." is kind of how these "accidents" are viewed around the world outside of the United States. You spilled a hot coffee on yourself? Don't get excited. You're not Stella Liebeck (1912-2004), the 79-year-old American woman that infamously sued McDonalds in a landmark case for suffering third-degree burns in her pelvic area when she spilled coffee in her lap. If you're reading this from outside the United States, you're probably shocked. It's rather commonplace here. Liebeck was initially awarded $2.7 million for spilling coffee on her own lap. That's equal to $5,000,000 in 2021. A judge reduced the punitive damages somewhat and the parties settled for an undisclosed amount. Given her age at the time it's extremely unlikely she got a structured settlement and instead received a one-time payoff. However, the point remains, these types of lawsuits are virtually unheard of elsewhere in the world.

Explanation of the Terms

Estructurada (f) or Estructurado (m) may be defined as "Structured"

For the definitions of words used below we referred to the Real Academia Española
  • Acuerdo Estructurado: One of the definitions for Acuerdo is Convenio entre dos o más partes or Agreement between two or more parties. Therefore, Acuerdo Estructurado can be seen as a "Structured Agreement". This isn't really the best translation in my opinion, although many use it. It doesn't take into account the annuity or money. A structured agreement could be anything really.

  • Anualidad Estructurada: One of the definitions for "Anualidad" is importe anual de una renta o carga periódica, como la de amortización o la de capitalización or Annual amount of income or periodic charge, such as amortization or capitalization. As you can see this definition doesn't fully describe the meaning of annuity in English. As mentioned above many annuities are paid monthly. Although you could simply multiply the monthly amount by 12 and come up with a yearly amount it doesn't quite capture the true English meaning of annuity. In loose terms Anualidad Estructurada can be understood as "Structured Annuity".

  • Indemnización Estructurada: One of the definitions for "Indemnización" is Cosa o cantidad con que se indemniza or Thing or amount that is compensated. Accordingly, Indemnización Estructurada can be seen as "Structured Compensation". In my opinion this, and liquidación estructurada are the two best terms used to describe a structured settlement annuity.

  • Liquidación Estructurada: One of the definitions for "Liquidación" is Accion y efecto de liquidar. One of the definitions for liquidar under the "derecho" or "law" definitions is Determinar en dinero el importe de una deuda or Determine the amount of debt in terms of money. Hence this can be comprehended as "Structured Debt" or more fully "Structured Debt Obligation". In this case meaning the amount of debt owed to the victim of a tort or wrongdoing. I believe this, and indemnización estructurada are the two best terms used to describe a structured settlement annuity.

  • Pagos Estructurados: Ok, finally an easy one. I bet almost anyone can guess this. We don't need to refer to the Real Academia Española for this. It means "Structured Payments". Of course, structured payments could mean any type of payment, it doesn't necessarily refer to annuity payments from lawsuits. Payments to an ex-wife could be "Pagos Estructurados". Additionally, dividends you receive every month from a Real Estate Investment Trust stock like Realty Income Corp (Ticker: O) could be seen as "Pagos Estructurados".

Spanish Lesson is Over

This post idea just came to my mind. Over many years I've heard all of the above refer to Structured Settlement Annuity payouts in Spanish. The two most accurate definitions in my opinion are Indemnización Estructurada and Liquidación Estructurada. We generally use the term Liquidación Estructurada just so that we're not bouncing all around with these various terms, but they all generally mean the same thing. I hope this cleared up some confusion for anyone out there wondering why there were so many different terms and which ones actually best represent structured settlement annuity payments.