Worked example: Structured Settlement in Arkansas

Example inputs

Run this scenario in DocketMath using the Structured Settlement calculator.

Below is a worked example showing how you might model a structured settlement scenario in Arkansas with DocketMath using jurisdiction-aware rules.

Jurisdiction used: Arkansas (US-AR)
Time limitation used: General statute of limitations (SOL) period = 6 years
Arkansas’s general SOL rule is found at Ark. Code Ann. § 5-1-109(b)(2).

Scenario setup (numbers you can change)

Assume a plaintiff expects a payout schedule starting after a settlement date. You’re modeling three elements:

1. Settlement date: 2026-05-01
2. First payment date: 2027-05-01 (one year deferral)
3. Payment stream:

   • Amount per year: $50,000
   • Number of annual payments: 10
4. Discount rate assumption (for time value of money):

   • Annual discount rate: 3.5%

DocketMath inputs to enter

Use the Structured Settlement calculator in DocketMath at: /tools/structured-settlement.

Typical inputs for a structured settlement model include:

• Jurisdiction: US-AR
• Start date: 2026-05-01
• First payment date: 2027-05-01
• Payment frequency: Annual
• Payment amount: 50,000
• Number of payments: 10
• Discount rate: 3.5%
• SOL horizon rule: apply Arkansas general SOL 6 years from **Ark. Code Ann. § 5-1-109(b)(2)

Checkboxes you can use while configuring your run:

Example run

Here’s a concrete run to illustrate the mechanics and what you get back.

Run the Structured Settlement calculator using the example inputs above. Review the breakdown for intermediate steps (segments, adjustments, or rate changes) so you can see how each input moves the output. Save the result for reference and compare it to your actual scenario.

Step 1: Establish the SOL “horizon window”

DocketMath will apply the general/default SOL period of 6 years. With a settlement date of 2026-05-01, the 6-year window ends on:

• SOL horizon end: 2032-05-01
  (Computed as 6 years from the start date; the exact boundary timing may matter if payments occur on the same day as the endpoint.)

Step 2: Identify which payments fall inside that window

Annual payments at $50,000 begin on 2027-05-01.

Payment dates:

• 1. 2027-05-01
• 1. 2028-05-01
• 1. 2029-05-01
• 1. 2030-05-01
• 1. 2031-05-01
• 1. 2032-05-01
• 1. 2033-05-01
• 1. 2034-05-01
• 1. 2035-05-01
• 1. 2036-05-01

Inside the SOL horizon (up to and including 2032-05-01) are payments 1 through 6:

• 6 payments × $50,000 = $300,000 nominal within the 6-year period

Payments beyond the horizon (payments 7–10) total:

• 4 payments × $50,000 = $200,000 nominal outside the 6-year period

Step 3: Discount to present value (modeled)

With a 3.5% annual discount rate, DocketMath will typically compute the present value (PV) of each payment as:

• PV = Payment / (1 + r)^t
  where t is the number of years from the settlement date.

Using the modeled timing (one-year deferral to the first payment), the year offsets for the first payment are:

• Payment 1 in t = 1
• Payment 2 in t = 2
• …
• Payment 10 in t = 10

Because this is a worked example, the key output buckets are:

• PV of payments within SOL horizon (payments 1–6)
• PV of payments beyond SOL horizon (payments 7–10)
• Total PV of all modeled payments

Output (illustrative totals)

• Nominal within SOL horizon: $300,000
• Nominal outside SOL horizon: $200,000
• Nominal total: $500,000

Discounting reduces later payments more than earlier ones. With a 3.5% rate and annual payments, the PV within the 6-year window will be materially larger than the PV outside it, even though nominal amounts are $300,000 vs. $200,000.

DocketMath’s structured settlement run will provide these PV-related outputs directly—use them to compare how the schedule shifts the economic impact within the SOL horizon window.

Step 4: Read the jurisdiction-aware SOL effect

The important part of the model is that the Arkansas SOL horizon is 6 years under:

• **Ark. Code Ann. § 5-1-109(b)(2)

That 6-year horizon is what determines which payments are treated as “within the window” for the calculator’s jurisdiction-aware breakdown.

Sensitivity check

Use a sensitivity check to see which inputs drive results the most. For structured settlements, three changes usually matter most: discount rate, timing (deferral/first payment date), and payment count.

To test sensitivity, change one high-impact input (like the rate, start date, or cap) and rerun the calculation. Compare the outputs side by side so you can see how small input shifts affect the result.

A) Change the discount rate from 3.5% to 5.0%

• If you increase discount rate, later payments lose PV faster
• In a schedule that extends beyond the SOL horizon (as here), the PV outside the horizon shrinks more than the PV inside

Expected directional effect:

• PV within SOL window: decreases, but less sharply
• PV outside SOL window: decreases more
• Total PV: decreases overall

B) Move the first payment date earlier (reduce deferral)

Try:

• First payment date from 2027-05-01 to 2026-11-01 (about 0.5 years after start)

Expected directional effect:

• More payments shift into the 6-year window
• The “within SOL horizon” bucket increases in both nominal and discounted terms

Because the SOL horizon ends at 2032-05-01, earlier payments can convert previously “outside” payments into “within” payments.

C) Shorten the number of payments from 10 to 8

Change:

• Number of annual payments: 10 → 8
• That removes two of the later payments (currently payments 9–10)

Expected directional effect:

• Nominal outside SOL window drops from $200,000 to $100,000
• PV outside SOL window drops even further because those removed payments are later (more heavily discounted)

Quick comparison table (nominal buckets)

Checklist for sensitivity runs:

Related reading

• Structured Settlement Calculator Guide for Alabama
• Structured Settlement Calculator Guide for Arizona
• Structured Settlement Calculator Guide for Colorado