OUR MOST COMMON QUESTIONS

While a conventional settlement consists of a one-time sum of money, a structured settlement usually includes cash at the time of settlement to cover immediate and short term needs, plus guaranteed periodic payments. These future payments are commonly funded with annuities from major life insurance companies or U.S. Treasury obligations. A structured settlement is an ideal way to create the financial security and peace of mind you want after an accident.

Working with a structured settlement professional, you can design a customized plan that provides tax-free income tailored to your needs. A structured settlement gives you the financial security to plan knowing that the (structured) future payments will be there to meet your anticipated needs.

A structure also gives you greater total payout than a cash lump sum settlement. This is because payments are made over time and include investments earning on the funding. Payments received in the settlement of physical injury cases are completely tax-exempt at the federal and state level, except for punitive damages or interest on judgments.

Structured settlements meet a wide variety of future needs. For example, it could be used to help replace or supplement income. For permanent and ongoing injuries, structured settlements can help cover ongoing medical care and equipment costs. Rehabilitation, training, resources to help people continue for years to come can be accommodated. Future payments could be used to help supplement retirement income with diversified tax free payments. Including lump sum payments along the way to cover milestone ages or anticipated special purchases.

For those with children, we can set up education plans, lifetime of guaranteed payments, lump sum payments at milestone ages, or any customized plan to meet future needs and goals. Memorializing the loss of loved ones with creative tax memorial funds or scholarships helps preserve the memory for years and generations to come.

A structured settlement is a settlement option that was developed to provide greater security and certainty to people made vulnerable by injury.

When contemplating a settlement offer, the question should not be if the settlement is enough, but whether the settlement offer is enough to meet their needs, present and future. That’s what a structured settlements is all about.

At one time, personal injury and wrongful death claims were only settled with the exchange of a lump sum of money. Unfortunately, too often cash-only settlements that are meant to last for decades are often exhausted within a few years. Most people have not had experience managing and preserving large amounts of money that need to last for long period of time. Structured settlement solutions are designed to assist parties by relieving them of the responsibility of managing significant sums of money.

Every injured person’s situation is different. But in times of unpredictable economic uncertainty, everyone deserves a failsafe future income stream that can’t lose value. Structured settlements provide that protection and peace of mind. Structured settlements allow for cost-effectiveness as well as creativity to ensure that payments are timed and tailored to meet the injured person’s needs. And most importantly, they provide long-term financial security that recipients can count on, regardless of economic fluctuations.

Your unique structured future payments are customized and guaranteed. Payments can be made over a designated for a set period of time or through your lifetime. That’s why it’s important we carefully evaluate the insurance company guaranteeing your structured settlement and find the best option for you.

Structured settlements offer many advantages over alternatives like a Certificate of Deposit (CD) or blocked savings account. Payment plans can be developed to cover costs for future medical needs, college, car payments, purchase of a first home and other life events. Structured settlements offer unmatched protection against future loss or dissipation of funds. People don’t have to be concerned with making a single payment last a lifetime.

The key is customized payment flexibility. Future payments can be customized for a specific period of time or a lifetime. Payments can be issued monthly, annually, quarterly, or semiannually. Benefits can start immediately or defer for years into the future with duration you choose. Payment amounts can stay the same or increase to account for inflation. Specific amounts on specific dates can also be guaranteed with lump sum payments.

You pick your payments.

Structured Settlements are a backed by many of the strongest and highest rated insurance companies in America. This is crucial because financial strategies for accident victims and dependents should be based on stable income from low risk investments.

During times of economic uncertainty, the guarantee of secure income for injured people is of utmost importance. Any decline in financial markets can cause significant devaluation of investment portfolios. Unlike traditional investments, structured settlements provide protection from economic uncertainty in an unpredictable economy. Structured settlement recipients will continue to receive their guaranteed benefits, with no reduction in value.

Encouraged by the federal tax code since 1983, structured settlements are widely recognized as amongst the most financially safe options available for physical injury settlements. Structured Settlements are regulated by Insurance Commissioners in all 50 states, not subject to reductions due to interest rate or market volatility, funded by a highly rated life insurance company, and backed by exceptionally safe “investment grade” assets. State laws strictly regulate the type and quality of investments that a life insurance company is allowed to make. Typically, more than half the investments held by a life insurance company are in “investment grade” bonds with less than five percent in the stock market. Changes in the stock and bond markets have little effect on a life insurer’s ability to make structured settlement annuity payments.

Long-term financial products, like a structured settlement annuity, should come from long-standing and reputable providers that have a diverse mix of business. Credit ratings are strong indicators of an insurance companies financial stability and their ability to provide guaranteed future payments. There are four major insurance company rating agencies: A.M. Best, Moody’s, Standard & Poor’s, and Fitch. Your structured settlement consultant will explain the strength and size of the company guaranteeing your future payments. Insurance companies rarely ever experience financial failure thanks to strong regulatory safeguards, but in the extreme instance when a failure happens there are significant safety nets in place to protect consumers.

When evaluating structured settlement options, long-term financial products like a structured settlement annuity should come from long-standing and reputable providers that have a diverse mix of business.

Credit ratings are strong indicators of an insurance companies financial stability and their ability to provide guaranteed future payments. There are four major insurance company rating agencies: A.M. Best, Moody’s, Standard & Poor’s, and Fitch. As your structured settlement consultant about the strength and size of the company guaranteeing your future payments.

Look for insurance companies who have been consistently offering structured settlements for many years and have industry expertise.

There are other structured settlement options tied to market based growth with the S&P 500 and Vanguard.

Most structures are funded with annuity contracts. Structured payments backed by annuities are guaranteed to be paid no matter what happens to interest rates or the stock market. You do not have to worry about where to invest or reinvest the settlement money and do not pay ongoing fees or management costs.

The Defendant, Insurer or Assignment Company responsible for making the future periodic payments must buy and own the funding contract. This is necessary to assure your payments are tax-free to the extent allowed by the Internal Revenue Code. However, the owner has the payment from the annuity contract sent directly to you.

Going to trial involves significant risks to all parties, and the time and expense of litigation can be burdensome. Structured settlements offer a tool for facilitative needs based negotiations and allow the parties to determine their own futures without the unpredictability of a trial.

In transactions involving real estate, capital assets, or business succession, including future payments will differentiate or could offer unique opportunities to both the buyer and seller.

Minor settlements are usually subject to more laws and requirements than settlements entered into by adults. This process allows the courts to ensure the settlement is fair and in the best interest of the child. Except in rare occasions, minor children are not able to accept their settlement money until they are of legal age, which means the money must be safeguarded until then.

Payments received in the settlement of physical injury cases are completely tax-exempt at both the state and federal levels, whereas investment earnings from all-cash settlements are generally taxable. By utilizing a structure for a child’s settlement, money grows income tax free and is paid out as directed by the parent(s)/guardian(s) and approved by the Judge.

Structured settlements offer many advantages over alternatives like Certificates of Deposit, blocked savings accounts, or deposit with the Registry of the Court. Payment plans can be created to cover costs for future medical needs, education, home or car payments, or other life events. Structured settlements offer unmatched protection against future loss or dissipation of funds. People don’t have to stress about stretching a single payment over a lifetime.

Structured settlement annuities are widely recognized as amongst the most financially safe options available for recipients of physical injury and workers’ compensation settlement money. Well into the hundreds of thousands of individuals and their families have enjoyed the enormous protection of these secure, tax free periodic payments. By opting for a structured settlement annuity, these individuals and their families chose the protective features of a structured settlement over the uncertainty, taxes, fees and financial volatility found in most other options.

A structured installment sale method is available to defer capital gains on both real and personal property, tangible and intangible. Capital assets are subject to capital gains. Under Section 1221 of the Internal Revenue Code, a capital asset includes artwork unless it is held by the person who created the artwork.

Contact us (link to page) to see if you qualify for the tax advantageous opportunities of a structured settlement.

Regardless of your age, a structured settlement after an injury offers the potential of a permanent solution for lifelong financial needs and long term financial security. Every structured settlement is custom-designed with payments varying depending on your age and injury. The result will be a guaranteed payment stream tailored to your specific future needs including medical and basic living expenses, providing a solid financial foundation.

Structured settlement make sense if you want to customize your future payments, financial security, federal and state tax advantageous investments not available outside your settlement, and/or preservation of means-tested government benefits and financial aid.

If you’ve been injured and have a resulting disability, federal and state laws let you direct your settlement into a special needs trust for your benefit. A Special Needs Trust (SNT) is a unique settlement tool for injured and disabled people under age 65 that allows the injured person to maintain eligibility for Supplemental Security Income and Medicaid while maximizing the funds received from a physical injury claim.

Individuals and families can be disqualified from Supplemental Security Income and Medicaid benefits by taking a cash settlement. Without eligibility and access to Medicaid, settlements can be depleted early due to ongoing medical and personal needs.

A special needs trust funded with a structured settlement can help keep eligibility and protect long term financial security. A structured settlement funding a trust helps protect against becoming wholly dependent on government services without additional source of lifetime security and peace of mind. This special needs trust gives your trustee an easy, secure way to pay your future bills while also protecting your eligibility for Supplemental Security Income (SSI) and Medicaid.

The proceeds from a structured settlement, in addition to cash proceeds, can be paid into an SNT to meet the needs of the injured individual that are not paid for by other federal, state or other public programs. Providing for additional expenses such as health care companions, education programs, transportation, and home modifications from the SNT can improve the quality of life for a severely injured person. In exchange for this continuing benefit eligibility, Medicaid maintains a right of reimbursement against any assets remaining in the Special

When an individual is disabled, they become qualified for Medicare even before age 65 if they have received Social Security Disability income (SSD) for 24 consecutive months. When the disabled individual is injured as a result of a work related injury or by a third party, the Workers’ Compensation coverage or the liability insurance (in a third party claim) is the primary payor and Medicare is the “secondary” payor (42 U.S.C. § 1395y(b) and 42CFR411, enacted 1981.)

Because Medicare does not pay for an individual’s injury related medical services and/or prescription drugs when the individual receives a settlement, judgment or award that includes funds for future medical and/or prescription drug expenses, it is in the best interest of the individual to consider Medicare at the time of settlement. For this reason, CMS recommends that parties to a settlement set aside funds, known as WC Medicare Set-Aside Arrangements (WCMSAs) No-Fault Liability Medicare Set-Aside Arrangement (NFMSA) or Liability Medicare Set-Aside Arrangement (LMSA) for all future medical and/or prescription drug services related to the WC injury or illness/disease that would otherwise be reimbursable by Medicare. In essence, the MSA effectively acts as “primary coverage” for injury-related treatment post-settlement. Once the funds are properly depleted, Medicare becomes the primary payor.

Writing structured settlements for the benefit of foreign nationals presents a unique set of issues, but it can be done. Reach out to us to learn more.

Employment litigation cases, including sexual harassment, wrongful termination and discrimination can also benefit from use of a structured settlement and help settlement proceeds last longer with deferred taxable structured settlement options. When a claimant is ready to settle, they have the option to receive their award in structured payments or a fully-taxable lump sum.

By stretching payments over time, there is opportunity to reduce taxability liability, protect funds from market volatility, and secure guaranteed payments over live with potentially lower marginal tax rates. Check out this video from MetLife outlining examples of employee litigation case types: Structured Settlements Video Center | MetLife Retirement & Income Solutions

Attorneys can accept all or a portion of fees in the form of periodic payments that are customized to meet your specific professional or personal financial goals.

The Internal Revenue Service has several rulings covering the deferral of taxes using periodic payments. Structured attorney fees provide stability and security, allowing attorneys to create predictable cash flow despite fluctuating income and unstable markets.

Structuring attorney fees also offer a tax deferred diversification to your current investment portfolio. This can be used to satisfy multiple future financial needs, including retirement planning without the restrictions seen in traditional retirement vehicles. By receiving payments over time, attorney fees accrue compound interest on a pre-tax basis, money saved may be invested with zero management fees, and you mitigate higher marginal tax brackets Payments are only taxed as the income is received. By structuring fees, you receive more income by spreading tax obligations over time when income is received, usually resulting in less taxation.

Even if the claimant decides not to structure their portion of the settlement, attorneys still have the option to structure fees.

Federal law recognizes that the injured may require special assistance in the aftermath of a tragedy. Conventional investing logic does not apply for those who have had and your wrongful death accidents. Guaranteed investments income is vital and very few certified planners have experience creating To meet this need with favorable tax terms and flexibility.

Structured settlements are not simply another investment. To qualify for tax free benefits, the terms of a structured settlement are actually crafted into the settlement language itself. If The settlement is not finalized exactly this way, the opportunity to structure the settlement is lost. A structured settlement representative represent a one-time opportunity to use to secure a key element of your financial future on uniquely favorable tax terms.

The role of a structured settlement consultant isn’t to sell annuities, but rather to facilitate settlements by ascertaining the long-term needs of the injured person and providing benefit options that will best serve them now and for years to come. Structured settlements are especially effective tools because they safeguard injured people’s settlement dollars in a way that no other product can. Because their versatility allows for both security and customization, structured settlements enable consultants to create a needs-based plan tailored perfectly to fit the unique needs of each injured person.

When you accept a structured settlement, you’re adding confidence and certainty to your financial future. Each year, thousands of Americans turn to structured settlements because no other option has so many unique advantages. Structured settlements are a unique (dare I say unicorn?) investment opportunity that do not exist outside of a personal injury settlement or other specific contractual agreements.

But what if I have a friend, family member or trusted financial advisor?

That's great news! People who are currently working with financial professional advisors are one step closer to recognizing the value of a structured settlement. A structured settlement provides a wonderful diversification opportunity for an investment portfolio.

Ask them what options they have offering guaranteed customized payments with no tax ever on interest dividends or capital gains? Do they have options with no ongoing costs and fees? Can they provide options with no penalty for payments prior to 59 1/2, offering multiple or variety of benefit streams including annual, monthly, lump sum and lifetime income? Can they put all that in writing? If not, let’s all talk so you can make the best informed decision.

A structured settlement annuity and financial funding assets offers you customized, guaranteed income tax-free payments, with no tax ever on interest dividends or capital gains…something most financial advisors are hard pressed to find competitive alternative. But that doesn't mean we don’t work with you and your advisor to discuss options that compliment, diversify, and enhance your current strategy.

We work with your financial advisor to answer questions in your evaluation of a structured settlement opportunity.

With a lump sum settlement, you must decide how to invest the money. Your investment income may depend upon current or future interest rates or investment instrument results. Some investments offer an attractive initial interest rate but for only a short period and then the rate decreases.

Most agree there is value in diversification of invested funds. The options for guaranteed income tax free future payments within an investment portfolio is often limited or restrictive.

Understandably, many financial advisors are unaware of structured settlements because it not an available in any traditional or retail investment product. Education for taxation, insurance, and/or investment professional licensing barely includes reference of a structured settlement in a footnote of training. Facilitating a structured settlement requires in-depth knowledge of IRS tax code, requirements to avoid constructive receipt, drafting of legal documents, and coordination of all parties involved in settlement.

Life companies and structured settlement providers require special licensing and appointments to sell structured settlements. We regularly work with financial planners, advisors, and consultants to help them evaluate and prepare structured settlement solutions for their clients. We take the time to answer all questions and explain the unique tax advantageous opportunities of a structured settlement. There also may be unique opportunities when a financial planner or fiduciary may stay involved in the market based investments of invested money. Ask me how. (Link to contact?)

Generally, no federal income taxes are due on the amount of each structured settlement payment that covers amounts described in Internal Revenue Code Section 104(a)(2) (See also IRS Revenue Ruling 79-220) relating to personal physical injuries or physical sickness. (See attached file p4345 HiLite)

Payments received in the settlement of physical injury cases are completely tax-exempt at the federal and state level, whereas investment earnings from all-cash settlements are generally taxable. This tax advantage only applies if a structure is chosen at the time of the claim settlement. (footnote disclosures here and all over the website.)

Payments received in the settlement of physical injury and Workers’ Compensation cases are completely tax-exempt at the federal and state levels (exceptions include punitive damages or interest on judgments). All future payments are free of personal state and federal income taxes.

For non-physical injury settlements, future payments are tax-deferred to the recipient allowing initial pre-tax investment of full amount. In contrast, investment earnings from all-cash settlements are generally taxable when payments are received over time.

Correct. There are no fees or costs for my services. We do not take a reduction in the investment cost from the personal injury settlement nor charge additional services fees. If your case settles with a structure, we am paid by the company making the future payments. Your full settlement goes towards your policy to make the payments you agree to at time of settlement.