Combining the Tax Advantages of a Structured Settlement with Market-Related Returns
Traumatic injures can be destabilizing, both emotionally and financially. Structured settlements help injured individuals plan for the future and regain control of their lives. We designed Settlements Plus™ specifically to provide injured claimants with even more flexibility and investment opportunities within a structured settlement.
What Is a Structured Settlement?
A structured settlement is a voluntary agreement reached between a claimant and a defendant. Prior to defense paying any settlement funds, the claimant elects to receive future periodic payments instead of a lump sum cash payment. Structured settlements offer significant tax benefits and allow claimants the opportunity to budget, safeguard, and maximize their settlement funds.
Income tax-free* payments are available for physical injury settlements, and for settlements involving non-physical injury, tax-deferred payments may be utilized.
Why Choose Settlements Plus™ (SP)?
- Tax-Free* Income for Physical Injury Cases: Unlike when claimants receive cash and invest outside of the settlement, SP payments are all tax-free including gains, thereby allowing the opportunity for greater rates of return on future payments.
- Tax-Deferred Income for Non-Physical Injury Cases: A claimant’s deferred funds can be placed in a vehicle other than a traditional annuity or U.S. Treasuries, allowing the claimant to realize market-related returns on the value of the future periodic payments.
- Market-Driven Growth Potential: In addition to tax-free or tax-deferred income on structured settlements, the claimant’s funds may be allocated to market-related investment portfolios.
- Asset-Class Diversification and Inflation Protection: Settlements Plus™ can help achieve asset-class diversification to address income needs, retirement planning and other financial considerations. It can also be used in conjunction with a structured settlement annuity to provide guaranteed fixed income and market-based income.
- Periodic Payments to Meet Unique Needs: Periodic payments are designed to deliver the flexibility and customization needed to meet a claimant’s individual financial needs.
- Use of a Personal Financial Advisor: Claimants can select a passive or an active investment management approach using a financial institution or their personal financial advisor. This allows for the investment to work in conjunction with their overall wealth management strategy.
*Periodic payments received on account of personal physical injury or sickness within the meaning of IRC 104(a) are excluded from gross income.