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February 16, 2016

Structured Settlements for Employment Lawsuits and Other Commercial Disputes

by John Darer® CLU ChFC MSSC RSP CLTC

Structured settlements are not just for personal injury, medical malpractice and wrongful death settlements. Structured settlements are also a great solution for settlements with taxable damages, such as employment lawsuits and commercial disputes, through non qualified assignments and periodic payment reinsurance.

Possible Tax Benefits of Non Qualified Assignments and Periodic Payment Reinsurance in Employment Settlements

Help spread tax liabilities throughout future years, smoothing out income and potentially alleviating high tax obligations in the year of settlement.

  1. A potentially greater overall payout than would otherwise be achieved with a single lump sum payment even taking into account taxes that ultimately have to be paid.
  2. Avoidance of higher tax brackets
  3. Preserve tax deductions that may be lost at higher income levels
  4. Avoidance or mitigation of the alternative minimum tax (AMT)

Today there is a variety of solutions

  • Annuity funded employment structured settlements that use domestic non-qualified assignments are currently available through appointed structured settlement consultants and brokers for Metropolitan Tower Life Insurance Company, American General Life Insurance Company,  United States Life Insurance Company in the City of New York. American General and United States Life insurance Company in the City of New York, also offer a funding agreement for use with the domestic non qualified assignments, where deferrals are desired longer than one year.
  • Independent Life Insurance Company is a provider of annuity funded employment structured settlements that use market recognized non-domestic assignment companies, Structured Assignments, SCC of Barbados and Kenmare Assignment Company Limited (Kenmare) of Ireland.
  • Anther non-domestic non qualified qualified assignment program, Havelet Assignment Company of Barbados, funds the periodic payment obligation using a private placement annuity.
  • Treasury Funded Structured Settlements can be used and are currently available through Structured Assignments, SCC (SASCC).  Structured Assignments, SCC is a Barbadios company, where in this case the periodic payment obligations are funded through the purchase of United States Treasury Obligations which are held in a sub-trust of a master trust at Midwest Trust Company. the SASCC facility may also be used for structured installment sales, enhanced attorney fee structures  (EAFS) and more.
  • Periodic Payment Reinsurance is available through National Indemnity Company, a unit of Berkshire Hathaway and a unit of American General. Many of the same transfers of risk can be accomplished as with non qualified assignments, however periodic payment reinsurance can only be utilized where the paying party is an insurer. An uninsured defendant must use a non qualified assignment. 
  • Market Based structured settlement solutions are also available for both plaintiffs and attorneys, with the appetite and risk tolerance.

Updated February 2021

Posted at 09:04 AM in Albany New York Structured Settlements, Boca Raton Florida Structured Settlements, Bowling Green Kentucky Structured Settlements, Bridgeport Structured Settlements, Bronx New York Structured Settlements, Brooklyn New York Structured Settlements, Buffalo New York Structured Settlements, Chicago Illinois Structured Settlements, Connecticut Settlement Planning, Conshohocken Structured Settlements, Detroit Michigan Structured Settlements, Employment Structured Settlements, Hartford CT Structured Settlements, Jacksonville Florida Structured Settlements, Liberty Mutual, Long Island NY Structured Settlements, New Jersey Structured Settlements, New Orleans Louisiana Structured Settlements, New York Structured Settlements, Newark NJ Structured Settlements, Newburgh Structured Settlements, NH structured settlements, NJ Structured Settlements, Non Qualified Assignments, Non Qualified Structured Settlements, NYC Structured Settlements, Orange County Structured Settlements, Palm Beach Structured Settlements, Philadelphia PA Structured Settlements, Rochester Structured Settlements, Sacramento Structured Settlements, San Francisco Structured Settlements, Santa Monica Structured Settlements, South Carolina Structured Settlements, St. Louis Structured Settlements, Structured Settlements, Structured Settlements Arkansas, Structured Settlements in Georgia, Structured Settlements in Illinois, Structured Settlements in Maine, Structured Settlements in Maryland, Structured Settlements in Miami Florida area, Structured Settlements in Nassau County, NY, Suffolk County Structured Settlements, Syracuse Structured Settlements, Taxes and Structured Settlements, VA Structured Settlements, Washington Structured Settlements, West Virginia Structured Settlements, White Plains Structured Settlements |

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Guide to Structured Settlements 2023

  • What is a Structured Settlement? What You Need to Know
    Structured settlements and what you need to know about them including a helpful introductory video featuring 2023 A.M. Best Client Recommended Structured Settlement Expert and Registered Settlement Planner John Darer® of 4structures.com® LLC
  • How Do Structured Settlements Work? How Structured Settlements Work
    How structured settlements work, including 4structures.com LLC's super helpful structured settlement flow chart/diagram showing how structured settlements fit in on the spectrum of settlement planning solutions.
  • Rated Ages and Structured Settlement Cost
    Rated Ages for Structured Settlement Annuities present advantages to all parties. Shift the mortality risk to a life insurance company whose business it it is to assess mortality risk to price its life insurance and annuities. Rated ages boost your structured settlement annuity benefit per premium dollar, or your yield on lifetime payments. Rated ages help to reduce the cost of funding a Medicare Set Aside arrangement where a Structured MSA, is being used { WCMSA LMSA or NFMSA].
  • Structured Settlement Annuity Companies 2023
    Which life insurance companies issue structured settlement annuities going into 2023? A list of current structured annuity issuers, the location of their home offices and their financial ratings from A.M. Best, Moodys, Fitch, Standard & Poors and/or other Tier1 NAIC ratings, with links to their websites and other useful information.
  • Treasury Funded Structured Settlements
    Treasury Funded Structured Settlements are a settlement option for the most conservative using the OTHER permissible qualified funding asset under IRC 130(d), United States Treasury Bonds in addition to, or instead of, structured settlement annuities. Treasury Funded Structured Settlements can also be used to fund installment sales, also known as structured sales and other non qualified structured settlements.
  • Compare Structured Settlement IRR to Other Settlement Alternatives
    Use the Taxable Equivalent Yield chart to help compare the Internal Rate of Return (IRR) of a structured settlement to other alternative or complementary investments. Need help with the chart? Call 4structures.com® LLC at 888-325-8640
  • Structured Settlement Payments | Types of Structured Settlements
    Ways You Can Structure Your Settlement Payments. With a structured settlement you can have more than one type of payment in a single contract. Different types of structured settlement payments can be customized and combined to meet your needs on a stand-alone basis, or in conjunction with other financial products. Diversify your structured settlement, if you wish, by funding with more than one annuity issuer, with treasury funded structured settlements, index linked structured settlement payments and market based structured .
  • Structured Attorney Fees for Tax Deferral for Contingency Fees
    Structured attorney fees is a financial strategy that offers a unique way to defer taxes for lawyers and law firms. Lawyers CAN structure their legal fees even if the plaintiff doesn't structure their settlement. There are multiple ways to structure your attorney fees, such as the an index linked structured settlement where payments are adjusted based on upside changes in the S&P 500 with no downside and a cap of 5%. Trial Lawyers may also use a special deferred pay/deferred compensation arrangement, if market based returns returns are desired with no cap. Plan NOW for year end! Put structured attorney fee expert John Darer® on your settlement planning team.
  • Structured Settlement Annuity Company Customer Service Phone Numbers
    Receiving structured settlement payments from your own structured settlement or inherited structured settlement? You'll like this huge time saver. Click the title for a link to a comprehensive list of customer service telephone numbers that includes both current AND former structured settlement annuity issuers and reinsurers. If you have simple bank or beneficiary changes, or if the insurance company that issued the structured annuity has merged, sold or spun off its block of structured annuity business (e.g. Aviva, Allstate, Transamerica, AEGON, GE Capital, Liberty, CNA, Confederation Life) or changed its name and you're trying to track them down, here you go! The list is regularly updated. Last updated September 14, 2023
  • Structured Settlement Quote Lock-Ins | What You Need To Know
    What does a Structured Settlement Lock-In Mean? How do plaintiffs, defendants and insurers benefit from a structured settlement quote lock in when finalizing a settlement? How does the defendant/insurer/court benefit from using a structured settlement lock-in? Where to be careful when using structured settlement lock ins.
  • What Are Structured Settlement Annuities?
    Structured settlement annuities are annuities that can provide one or more customized annuity payment streams in a single contract. Read about structured settlement annuities here.
  • History of Structured Settlements
    Tracing the roots of structured settlements history from 1918, when Congress exempted damages for personal injury or sickness from income tax, to the establishment of structured settlements as a core personal injury settlement planning tool to the present day.
  • What Are Market Based Structured Settlements?
    Market based structured settlements are an alternative or supplementary structured settlement solution for the plaintiff, attorney or law firm that: 1. Can afford to take some market risk 2. Have discretionary settlement dollars. Claimants and attorneys alike may find that market-based structured settlements provide the opportunity to receive tax-free income, or tax-deferred income, while enjoying growth potential.
  • iStructure |Uncapped Fixed Index Structured Settlement Annuity
    iStructure is an innovative game changing fixed index structured settlement annuity for plaintiffs or attorneys. with an intermediate to long term horizon

Qualified Settlement Funds

  • What is a Qualified Settlement Fund?
    Qualified Settlement Funds | What You Need to Know
  • Firmwide Qualified Settlement Funds Debunked
    Firmwide qualified settlement funds have been heavily promoted to trial lawyers, but have been debunked in a detailed analysis in a July 2022 legal opinion a tax partner at the law firm of Faegre Drinker Biddle & Reath, LLP. Trial lawyers and firms who have established Firmwide QSFs or coinsidering establishing a Firmwide QSF should read the analysis as part of their evaluation.

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  • STRUCTURED SETTLEMENTS 4REAL® Blog Is a Popular Source of Structured Settlement News and Information, John Darer Reviews, Settlement Planning News and Financial Solutions for over 17 years,
    with a stable readership that seeks credible structured settlement information, John Darer Reviews, commentary and/or opinion about topical issues related to settlement planning, targeted to lawyers, injured persons and their family members, guardians, survivors, judges, magistrates, special masters, mediators, administrators, trust companies, insurance company executives and adjusters, financial advisers, settlement professionals, financial professionals, insurance regulators, government leaders, federal and state law enforcement, buyers and sellers of structured settlement payment rights, the news media and other interested parties. 4structures.com LLC established this structured settlement blog in 2005. John Darer ®, CLU ChFC MSSC CeFT® RSP CLTC, President of 4structures.com, located in Stamford, CT 06902. John Darer is an experienced New York City area structured settlement expert, structured settlement broker, Certified Financial Transitionist, and Registered Settlement Planner. He holds insurance licenses in 45 states, has 40 years financial services experience and more than 29 years in the structured settlements and settlement planning space. In his capacity as a investigative journalist and commentator, and professionally, John Darer passionately believes that shining the light on a business practice is both healthy and newsworthy. It is in the best interest of injury victims, their families and their legal advisers, that the settlement planning discussion involve those that are properly trained in the topic, properly informed on the topic and, with respect to structured settlements, properly licensed and/or appointed. It has significant instructional and deterrent value to other practitioners and firms as well as those who may be caught in the cross hairs. WHAT YOU GET here is the straight stuff with a touch of irreverence and humor. We hope you enjoy and find the content to be helpful. Subscribe to the structured settlement blog feed, or a specific category feed through your blog reader, or through the Subscribe button at the top left of this page. Followers of JDDarer™ on Twitter may also receive select content. If you would like to speak with John he can be reached at (888)325-8640 Thank you for reading! Last updated October 8, 2023

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Structured Settlement Best Practices Corner

  • New York Insurance Advertising law requires the full name of the Insurer to be listed along with the city and state of the principal office. Stating that you represent these fine companies using Insurance company logos without the preceding information are also illegal
  • When it comes to settlement documents it is the ultimate responsibility of the lawyers or claims adjusters who receive input concerning the structured settlement aspects of the documents to actually read the entire document, exercise independent thought and advise their clients properly
  • Be aware that financial advisors use of testimonials is prohibited or restricted
  • Most states require that Testimonials represent the CURRENT opinion of the person who made the testimonial. Be prepared to back it up.
  • Number of States That Prohibit Payment of QSF expenses by licensed agents and brokers
    5 Survey not yet complete.

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Why Take a Structured Settlement?

  • A structured settlement offers guaranteed financial security to personal injury victims, wrongful death survivors and their families. A structured settlement involves a customized stream of payments, provides long-term stable tax-free income, for a period of years or a lifetime. Unlike other income annuities. a structured settlement annuity can have multiple payment streams to address multiple needs in a single contract.

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