Worked example: Structured Settlement in Brazil
7 min read
Published April 15, 2026 • By DocketMath Team
Example inputs
Run this scenario in DocketMath using the Structured Settlement calculator.
Below is a worked example showing how you could model a structured settlement in Brazil (BR) with DocketMath using jurisdiction-aware rules for cash-flow timing, inflation indexing options, and installment schedules.
Note: This walkthrough is for illustration and planning. It does not create legal advice, and it won’t replace review of the settlement instrument (e.g., court approval requirements, payment mechanics, and tax treatment agreed in the contract).
Scenario snapshot (used throughout)
- Claim date (reference date): 2026-01-15
- Settlement type: Defendant funds periodic payments instead of a single lump sum
- Settlement amount (target total to fund): BRL 1,500,000
- Payment frequency: Monthly
- Duration: 5 years (60 months)
- Payment start: 2026-02-15 (one month after claim date)
- Discount/investment rate (annual): 10% (nominal)
- Inflation indexing: On (index payments using a fixed annual inflation assumption for modeling)
- Inflation assumption (annual): 4%
DocketMath structured-settlement parameters
In DocketMath’s structured-settlement calculator, you can express the model using inputs like:
- Total present funding target (how much money the structure must effectively cover today)
- Installment schedule (number of payments, start date)
- Time value of money assumptions (discount rate)
- Optional indexation (inflation assumption)
- Optional payment rounding rules (to nearest centavo)
For this example, set:
- Total settlement (nominal): BRL 1,500,000
- Start date: 2026-02-15
- Term: 60 monthly installments
- Discount rate (annual): 10%
- Indexation enabled: Yes
- Inflation (annual): 4%
- Rounding: Round each installment to BRL 0.01
What outputs you should expect
A structured-settlement model typically provides:
- Monthly installment amount (and indexed future amounts)
- Present value (PV) of the payment stream (discounted back to the claim/reference date)
- Total nominal payments over the term
- Any funding gap indicators if the tool supports “solve for payment size” logic to match the target PV/funding amount
To kick off the computation directly, use the DocketMath tool here: /tools/structured-settlement.
Example run
This section walks through a plausible DocketMath run for the scenario above.
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: Convert annual assumptions to monthly factors
With monthly installment spacing, DocketMath applies monthly compounding assumptions from your annual rates.
- Monthly discount rate (nominal), approximated from 10% annual:
- ( i_d \approx (1 + 0.10)^{1/12} - 1 )
- Monthly inflation index assumption, from 4% annual:
- ( i_{inf} \approx (1 + 0.04)^{1/12} - 1 )
DocketMath handles these conversions internally in the structured-settlement calculator.
Step 2: Build the indexed cash-flow schedule
Because indexation is enabled, DocketMath models each payment as increasing by the inflation factor over time (based on the inflation assumption you provided).
So you effectively get two “views” of the same stream:
- Nominal payments over time (increasing due to indexation)
- Discounted PV (reduced due to the time value of money)
Step 3: Solve for the installment level that matches BRL 1,500,000 funding
The practical question DocketMath answers during the run is:
- If the structure is intended to be economically equivalent to BRL 1,500,000 funded today, what is the correct installment schedule amount (especially the month-1 baseline installment)?
In a typical solver approach, DocketMath chooses the month-1 installment such that the present value of the indexed stream equals the funding target.
Example result (illustrative numeric output)
Assuming the model solves for the month-1 baseline installment, a plausible set of outputs could look like:
| Metric | Value |
|---|---|
| Month-1 installment (indexed baseline) | BRL 23,750.00 |
| Total nominal payments (60 months) | BRL 1,857,400.00 |
| Present value (discounted to 2026-01-15) | BRL 1,500,000.00 |
| Effective “funded” gap | BRL 0.00 (by design) |
A couple of takeaways:
- Even when PV equals the funding target, nominal total paid can be much higher because indexation increases payments.
- Discounting offsets the inflation-driven payment escalation when measuring economic equivalence.
Timing detail: first and last payments
- First payment: 2026-02-15
- Last payment: 2031-01-15 (60th monthly installment)
If you change the payment start date later, DocketMath recalculates PV because cash flows shift forward in time.
Output sanity checks you can do immediately
After a run, verify:
- Installments are 60 in count and evenly spaced monthly
- PV equals your target (if the setting instructs the solver to match funding)
- Payments increase over time when indexation is enabled
Sensitivity check
Structured settlements can be sensitive to assumptions—especially discount rate, inflation/indexation, and term length. Below are concrete “what changes” you can test quickly in DocketMath.
Warning: Small percentage changes (e.g., discount rate from 10% to 9.5%) can materially shift the baseline installment because the model discounts dozens of months of payments.
Sensitivity matrix (hold everything else constant)
Assume the same total funding target BRL 1,500,000 and the same 60 monthly payments starting 2026-02-15. Only adjust the assumptions below.
Expected directional effects (model behavior)
1) Discount rate decreases (10% → 9%)
- Discounting is less aggressive, so the PV of later payments is higher.
- To keep PV equal to BRL 1,500,000, DocketMath will reduce the baseline installment.
Practical consequence: lower month-1 installment, though nominal payments may still rise due to indexation.
2) Inflation increases (4% → 6%)
- Indexed payments increase faster over time.
- With PV fixed at BRL 1,500,000, DocketMath lowers the baseline installment so the higher index growth doesn’t overshoot the PV.
Practical consequence: you may pay less “up front” but more in later nominal terms.
3) Indexation turned off (fixed nominal payments)
- With indexation disabled, nominal payments stop growing.
- To match PV, DocketMath can increase the baseline installment relative to the indexed case (because you no longer rely on inflation-driven escalation).
Practical consequence: lower nominal totals versus the indexed scenario (all else equal).
4) Term shortened (60 months → 48 months)
- Fewer payments extend less into the future, so PV burden shifts earlier.
- To match PV, DocketMath typically raises the baseline installment (because you amortize the same funding target over fewer monthly payments).
How to record the results while testing
Create a quick comparison table after each run:
| Test | Month-1 installment | Total nominal paid | PV |
|---|---|---|---|
| Baseline (10% / 4% / indexed / 60 mo) | BRL 23,750.00 | BRL 1,857,400.00 | BRL 1,500,000.00 |
| Discount 9% / 4% / indexed / 60 mo | (rerun) | (rerun) | 1,500,000.00 |
| Inflation 6% / 10% / indexed / 60 mo | (rerun) | (rerun) | 1,500,000.00 |
| Indexation off / 10% / fixed / 60 mo | (rerun) | (rerun) | 1,500,000.00 |
| Indexed / 10% / 4% / 48 mo | (rerun) | (rerun) | 1,500,000.00 |
Checklist for repeatable runs:
Small timing changes matter too
Even without changing rates, changing the payment start by one month alters PV because each cash flow is discounted over a different horizon.
If you’re planning around agreement milestones, test:
- Payment start moved from 2026-02-15 to 2026-03-15
- Compare PV and month-1 installment
In most models, a later start forces a higher month-1 installment to meet the same PV funding target.