by John Darer CLU ChFC MSSC CeFT RSP CLTC
Thinking about what happens to structured settlement payments after the death of the Measuring Life, which of these four statements is correct when used to fill in the blank?
- inherit a structured settlement annuity
- inherit the right to receive future periodic payments
- inherit structured settlement payments
- inherit a structured settlement
D 2, 3 and 4
E. all of the above
The correct answer is D, because nobody can actually inherit a structured settlement annuity.
A structured settlement is established by contract between settling parties to a claim or lawsuit. When a structured settlement is established part of the consideration for the release of the Defendant is an obligation to make future periodic payments (structured settlement payments). Generally this future periodic payment obligation is assigned by way of what is known as a qualified assignment to a qualified assignment company
In general, a structured settlement annuity is a qualified funding asset (defined at IRC 130(d) and owned by a qualified assignment company. Neither a Payee, nor a Contingent Payee, actually owns the annuity contract funding the periodic payment obligation to them.
Structured settlement payments can be inherited by beneficiaries
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