by John Darer CLU ChFC MSSC RSP CLTC
Structured annuity companies should contemplate more than a single scenario when creating document templates within their quoting software, especially Qualified Assignment Release and Pledge agreements which are used to help create a security interest in a qualified funding asset as part of the qualified assignment process under IRC 130.
Virtually all cookie cutter structured settlement documents work for single adult plaintiff. But the "cookie cutter" documents quickly lose their utility when the Payee is a person or entity that different than the person releasing the claims against the Defendant.
- Parents on behalf of minors, with minor to receive structured settlement payments at and after the age of majority
- A Special Needs Trust, as Payee
- A Settlement Preservation Trust, as Payee for some or all of the structured settlement payments.
A well respected tax attorney in the industry once said that the proper secured party is the payee of the future periodic payments ( the individual or entity to whom payments are made)
If a trust is the payee, and thus is listed as the secured party, the traditional opening paragraph of many structured settlement "cookie cutters" states that the "Claimant-Secured Party" is a party to the lawsuit and has executed a settlement agreement or release"which does not make sense!
If the goal of the "cookie cutter" is to make the life insurer's, post sale team's job easier then how about offering up some choices in contemplation of various on types of cases? How about starting with the types of cases cited in the above example?