by John Darer® CLU ChFC MSSC RSP CLTC
An individual can enter into a qualified assignment as the assignor and the assignment will qualify under IRC §130. The individual must be a party to a suit or agreement and the payment obligations being assigned must be exempt from income tax under IRC 104 (1) or IRC 104(a)(2)- generally on account of physical injury physical sickness, wrongful death, or workers compensation.
The individual would have to have enough money to cover the cost of the qualified funding asset(s), which, pursuant to IRC §130(d) , may be a structured settlement annuity or an obligation of the United States government.
While liability insurers and self-insured corporations are the most common type of assignor, for IRC §130 qualified assignments, an individual with sufficient financial resources could be an assignor if:
- The individual has no insurance; or.
- The individual is under insured and the damages for the claim against the individual exceed the policy limits of insurance coverage;or
- The individual is insured but the insurer has denied coverage; or
- The individual's insurance company is insolvent.
An individual could also be the assignor if a structured settlement is for taxable damages, a so-called non qualified assignment, non qualified structured settlement, or tax deferred structured settlement.
- taxable elements of a divorce settlement
- resolving a business dispute
- resolving a property dispute