 The payments were tax free, whereas if the tort victim had been given a lump sum and invested it themselves, the payments from those investments would be taxable.Companies liked structured settlements because it allowed them to avoid taxes to a certain extent, and plaintiffs liked them because it allowed them to receive tax-free payments of what became, over time, a much larger amount of money than the original amount paid out by the settling party.Such settlements were also considered an especially good idea for minors, as they held the money safe for adulthood and ensured that youth would not find the money wasted or ill-spent.