What is a Structured Settlement?
A structured settlement is a voluntary agreement reached between a plaintiff and a defendant under which the claimant’s settlement proceeds are disbursed in a series of periodic payments. Structured settlement annuities offer valuable advantages for physical injury and non-physical injury cases.
Benefits of Tax-Free & Taxable Structured Annuities
- Tax-Free Income for Physical Injury Cases: The full amount of the structured settlement payments including growth is exempt from federal and state income taxes under 104(a) of the IRS codes.
- Tax-Deferred Income for Non-Physical Injury Cases: The claimant receives the benefit of tax-deferral on their payments along with competitive rates of return.
- Competitive Rate of Return: Structured settlements typically offer rates of return that are competitive with many traditional investment vehicles, without the risk of market volatility.
- Safe and Reliable: The claimant receives guaranteed*payments from one of the safest investments available: An annuity issued by a highly-rated life insurance company.
- Customized Payment Options: The periodic payment schedule offers a variety of options to help fit the claimant’s financial needs.
*Guarantees are subject to the claims-paying abilities of the issuing insurance company.
Applicable Case Types
- Structured Installment Sales
- Employment Issues
- Age, Gender, or Race Discrimination
- Attorney Fee Deferrals
- Divorce Settlements
- Environmental Litigation
- Sexual Harassment
- Legal Malpractice
- Property Disputes
- Breach of Contract
- Fraud Claims
Tax-Deferred Structured Settlements
Tax-deferred structured settlements are available to help maximize and preserve settlement proceeds for the following type of cases:
- Contingent attorney fee
- Punitive damages
- Employment disputes (no wages)
- Breach of contract
- Property damage
- Environmental claims
- Construction defect
- Sexual harassment
- Other non-physical injuries