Is a Treasury Funded Structured Settlement™ (TFSS) tax-free?
Physical injury settlement proceeds used to fund a TFSS are free from federal and state income taxes under Section 104 of the Internal Revenue Code. Non-physical injury settlement proceeds placed into a TFSS provide tax-deferred payments.
Are Treasury Funded Structured Settlement™ payments secure?
Yes. Once funded, the payments are backed through the purchase of United States Treasury Obligations. Regardless of market performance, payments will not change, providing the claimant with a secure source of income.
What type of tax reporting is required for Treasury Funded Structured Settlements™?
For taxable settlements, the trust company, on behalf of the assignment company, will issue a 1099-MISC to the payee during the year(s) that payments are made. The claimant then reports payments as ordinary income for tax purposes.
What kind of payments schedule can be created using a Treasury Funded Structured Settlement™ (TFSS) ?
A TFSS can be structured to pay monthly, semi-annually, annually, or in periodic lump sums, up to a period of 30 years. The payments are customized to meet the claimant’s present and future needs during the time of settlement.