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Settlement Management Trusts

The Value of a Settlement Management Trust (SMT)

Sometimes referred to as Settlement Preservation or Protection Trusts, SMTs can deliver market-related performance and potential appreciation in value. They offer a cushion for unforeseen expenses, thus protecting the structured settlement cash flow.

Settlement Management Trusts are essential when the settlement plan would benefit from adding market-related growth along with flexibility to cover unforeseen needs. The overall settlement plan may be augmented by placing some funds in a revocable donor trust that invests and manages funds for the trust beneficiary.

Advantages of SMTs

One of the most significant benefits of an SMT is that it can provide the assistance of a professional trust officer to support the beneficiary and their family on an ongoing basis (per the trust agreement). The combination of a blended approach in combining the benefits of the structured settlement annuity with the flexibility and features of a trust can prove to be a beneficial strategy.

Settlement management trusts offer a number of additional benefits, including but not limited to:

  • Spendthrift protection
  • Increased flexibility in managing future financial shifts
  • Controlled liquidity
  • Potential for additional income accrual with rising interest rates
  • Flexibility in accommodating changing tax concerns
  • Protection of structured settlement payments for intended purposes

Delivering Leading Trust & Settlement Management Services

At Structures, we maintain relationships with leading trust companies around the nation that work in partnership with experienced settlement consultants to develop a truly comprehensive solution. For additional information on these trust programs please contact your settlement consultant or the Structures Team.

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