by John Darer CLU ChFC MSSC CeFT RSP CLTC
One structured settlement industry website at the time of publication had things all discombobulated in relation to how structured settlement payments are negotiated:
"When a case involves personal injury, the amount of money necessary to cover the victim's medical care and living costs is negotiated between the plaintiff and defendant. To ensure that plaintiffs receive the best settlement possible, it is essential to involve a structured settlement expert, who will work in the client's best interests and find a plan that works for them.
Once this agreement is made, the defendant funds a stream of payments to the plaintiff, according to specific needs. In most cases, the defendant then transfers the responsibility to a "qualified assignment," which funds the damage payments with an annuity".
What It Is Not
- The Defendant does not fund a stream of payments and then transfer the responsibility to a "qualified assignment".
- A "qualified assignment" is a process defined under Section 130(c) of the United States Internal Revenue Code. It is not a legal entity. However an assignment company is!
What it is
- The structured settelment process is more accurately described in the following flow chart and How Structured Settlements Work | Structured Settlements Explained (4structures.com)
It's important that those who are establishing structured settlements for injured parties and their attorneys be able to articulate what they are selling accurately.
Last updated February 13, 2023