BLANK Settlements

Structured Settlements

The US Congress enacted legislation which allows the future periodic payments of certain types of injury and sickness claims (or settlements) to be income tax-free. Structured Settlements are often the preferred solution used to preserve the tax-free status of the future periodic payments. By configuring the settlement of a claim with a Structured Settlement, the stakeholders (the Injured Person and the Defendant) receive significant benefits from the win-win opportunities created by the Structured Settlement. Notwithstanding the occurrence of an otherwise unfortunate injury event, Structured Settlements can at least provide those who have suffered with a feeling of safety and security.

Advantages of Structured Settlements:

Interest accumulated is income-tax free
Provides safety and security. The payments are generally funded with a special type of “fixed” annuity from a highly rated life insurance company.
Not subject to stock market volatility. "Fixed" annuities are insurance annuities.
There are NO transactional fees of any kind. There are NO money management fees.
They are not considered a personal asset, they can be formatted to preserve SSDI and other benefits.

Structured Settlements are commonly used in the following types of claims:

Guardian and Conservatorship
Wrongful death or Fatality
Catastrophic injuries requiring assisted living and long-term care
Workers Compensation claims, including Indemnity payments and Future Medical Care (and funding a Medicare Set-Aside arrangement).
Many types of Personal Injury settlements
Structuring Attorney fees can be used as a plan to Defer Compensation (tax deferral, not income tax-free)
Attorney’s Fees
Medical Malpractice

IMPORTANT – NO Constructive Receipt

Settlement funds must NOT be constructively received by Plaintiff Attorney not Plaintiff
The Settlement funds must flow from Defendant to your Structured Settlement Consultant (the Settlement check will be made payable to the previously agreed upon Life Insurance Company that was selected to fund the future periodic payments)

The tax regulations enacted by the US Congress:

The Periodic Payment Settlement Act of 1982 (P.L. No. 97-473), Congress adopted specific tax rules to encourage the use of structured settlements to resolve physical injury cases.
Section 104(a)(2), 104(a)1, and 130(c) of the Internal Revenue Code clarifies that the full amount of the structured settlement payments is tax-free to the victim. (By contrast, the investment earnings on a lump sum payment are usually fully taxable.)

Non-Injury Claims – Non-Qualified Structured Settlements:

Claims that do not qualify under Section 104(a)(2), 104(a)1, and 130(c) of the Internal Revenue Code can be Structured so as to provide accumulated interest as income tax-deferred.

Environmental claims
Divorce and alimony payments
Property damage or disputes
Disability benefits
Errors and omissions, and Directors and Officers laibility
Employment litigation (wrongful termination, age discrimination, sexual harassment, racial discrimination)
Bad Faith
Legal malpractice
Breach of contract
Punitive damages
Other non-physical injuries
Punitive Damages