Tax-Exempt

Structured Settlements

What is a Structured Settlement?

A Structured Settlement is a customized stream of future periodic payments widely used for decades to resolve a personal injury, wrongful death and workers’ compensation claim settlements. Instead of a lump sum settlement, a personal injury victim has the opportunity to receive all or part of their settlement in the form of future periodic payments funded through highly-rated Life Insurance Companies. A structured settlement is unique in that it provides guaranteed tax free payments paid for life or a specific period of time. They offer a wide range of payment designs including monthly, quarterly, semi-annual, or annual fixed amounts or a predetermined cost of living adjustment. Payment programs could also include preset lump sum payment distributions.

Objectives of a Structured Settlement

The objective of a Structured Settlement is safety, security, guaranteed tax-exempt returns, and protection from the dissipation of the settlement funds too quickly. A structured settlement is not an investment or market-based product. It is an insurance policy through a life insurance company that generates reliable tax-free payments at low risk.

Who is entitled to a Structured Settlement?
How is a Structured Settlement funded?
Are there fees or expenses associated with a Structured Settlement?
Why should Structured Settlements be considered?
Where do you go for all of your Structured Settlement needs?

Structured Settlements are crucial in funding Medicare Set Aside Arrangements, Medical Trusts & Special Needs Trust

Medicare Set-Aside arrangements

The Centers for Medicare & Medicaid Services (CMS), a federal agency, allows for a Medicare Set-Aside to be funded over time using structured settlement payments versus a lump sum payment and is advantageous to the injured worker and the employer or its workers compensation carrier.

Medical Trust is for those not Medicare or Medicaid eligible, who do not have private insurance, or whose Workers’ Compensation benefits will cease at the resolution of their claim. A Medical Trust provides payments for medical care and durable medical equipment “DME” and can include educational needs for themselves or their children.

Special Needs Trust can preserve a plaintiff’s Medicaid benefits, but only if Medicaid deems them disabled. Structured Settlements used with Special Needs Trusts eliminates the need for the plaintiff to decide between one product or the other. Most Special Needs Trust Trustees prefer periodic payments from a structure flow tax-free into the Trust. (1) to establish a monthly budget and (2) to ensure there is a steady flow of income for a specific time or the lifetime of the plaintiff.

The Unique Benefits of Tax-Exempt Structured Settlements

One-Time exclusive option for a personal injury victim, but only at the time of their claim settlement
Lifetime payments the personal injury victim cannot outlive
Special pricing for impaired individuals
100% Tax-Exempt payments (Principal amount and the earned Interest)
Protection from creditors, judgments, the premature dissipation of funds, and in most cases, marital distribution
Guaranteed Returns
Exclusion of the 10% penalty rule for disbursements before age 59 ½
Commutation and Cost of Living Adjustment riders
Continuation of payments to beneficiaries on a tax-exempt basis
Structured Settlements offered through highly rated and regulated life insurance companies
No yearly or management fees are associated with structured settlements

Settlement Structure
Options

Life with Period Certain Annuity – provides equal payments to the plaintiff throughout his/her lifetime with a guaranteed period
Period Certain Annuity – provides equal payments for a guaranteed period
Guaranteed Lump Sum Payment – provides a payment on a specific date(s)
Joint and Survivor Annuity – provides equal payments to the plaintiff and spouse for as long as they both live with payments continuing at 100% to the survivor.
Temporary Life Annuity – provides equal payments for as long as the plaintiff is living but only up to a specific number of years.

Essential Information

Personal Injury & Wrongful Death

A physical injury or the death of a loved one is emotionally and financially devastating and can affect every aspect of your life.

A catastrophic accident or medical mistake often leaves a personal injury victim disabled and impacts their earning capacity significantly. Their injuries prevent them from returning to the workforce and reduces their earning power. When the primary or sole income provider dies, the spouse may be forced to make major changes in their life, such as moving from their home because it is no longer affordable or not being able to pay for their child’s education.

A structured settlement can help ease these heavy financial burdens with guaranteed tax-exempt payment streams designed to provide long-term financial stability.

Workplace injuries can have a long-term effect on future wages and medical care. Structured settlements provide the injured workers with the ability to address these concerns by designing payment streams to replace all or part of their wages, provide payments for ongoing medical expenses, and family needs such as a child’s education.

Upon the death of a worker, typically, their workers’ compensation benefits end leaving the family without a source of income. Structured Settlements can offer a solution with guaranteed payments to the injured workers’ spouse or children. If a widow or widower remarries, worker’s compensation benefits will stop. However, a Structured Settlements allows the future payments to continue to them.

Structured Settlements are used to fund Medicare Set-Aside arrangements. The Centers for Medicare & Medicaid Services (CMS), a federal agency, allows for a Medicare Set-Aside to be funded over time using structured settlement payments versus a lump sum payment and is advantageous to the injured worker and the employer or its workers compensation carrier.

Mortgage/Rent Payments
Replacement, Supplemental, or Retirement Income
Medical Expenses
College and Educational Needs
Nursing Home Care
Daily Transportation
Living Expenses and Household Services
Vacation or Holiday planning
Scholarship funds in the memory of a deceased loved one

Life with Period Certain Annuity – provides equal payments to the plaintiff throughout their lifetime with a guaranteed period
Period Certain Annuity – provides equal payments for a guaranteed period
Guaranteed Lump Sum Payment – provides a predetermined payment on a specific date(s)
Joint and Survivor Annuity – provides equal payments to the plaintiff and spouse for as long as they both live with payments continuing to the survivor
Temporary Life Annuity – provides equal payments for a set number of years but only if the plaintiff is living.