Helping you to make the most out of your structured settlement
Settlement Success Intermediaries
A structured settlement annuity is considered a qualified annuity. A qualified annuity recipient is generally a physically injured person who through a settlement is to be compensated in the form of periodic payments in lieu of a single lump sum payout. Periodic payments are received by the injured party free of any federal or state income tax. The same annuity contracts are also available to spouses and children of a decedent in wrongful death actions.
For an annuity to be considered qualified, the injured party can’t own or control the payment stream of the annuity. The injured party must allow for the defendant to enter into a qualified assignment, a document which transfers all rights of ownership of the annuity contract, and the defendant’s future liability to provide the agreed upon periodic payments to an assignee, which is usually a company affiliated with the annuity issuer (life insurance carrier).
When a plaintiff has incurred a cognitive or physical injury which clearly diminishes their mortality, submission of a recent independent medical evaluation to all annuity underwriters will sometimes result in shortening the plaintiff’s mortality providing for a reduced premium any life contingent benefits being considered.
Medical Indemnity Fund Cases
New York State has created what is called the medical indemnity fund which provides medical aid for any child who has incurred a neurological insult at birth. The fund provides some relief to defendant hospitals who otherwise would have to shoulder the entire future medical costs on their own.
Attorney Fee Structures
Most jurisdictions provide for plaintiff council to structure all or any portion of his fee received in a personal injury action. The ability to structure a fee enables the attorney to plan his future income stream and provide himself with a personal pension plan. While the annuity is not considered a qualified annuity, it does provide the attorney with the tax benefit of being able to defer paying taxes on a single lump sum payment received in that calendar year, until the fee is actually paid over time, paying taxes on the amount as received in the calendar year received.
Assess Life Care Plans to present day costs
In an attempt to provide all parties with total cost of lifetime medical benefits, the plaintiff attorney will ask an economist expert to provide him with a total medical cost of the injury over the injured parties lifetime. A structure broker will take these lifetime numbers and reduce them to present day value in order to place a more practical settlement value on an annual number that will be paid to the plaintiff over his lifetime.
Settlement document preparation and review
The Structured Settlement broker must take special care in preparing and reviewing all documents, to include the Court Order, Settlement Agreement and Release, Qualified Assignments, Applications and finally reviewing the annuity contract when received.
Before entering the courtroom to begin a trial, a final effort to settle a claim between the two parties can be brought to a mediator. The mediator, usually a retired justice discusses the pros and cons of both plaintiff and defense cases in an attempt to assist both parties reach an understanding as to why it’s in both parties interests to settle the case before entering into a lengthy and expensive court trial.
Wrongful Death calculations (Kaiser)
Wrongful death settlements need to be disbursed to all immediate family members, to include the surviving husband or wife and all children under the age of twenty-one at the time of the parent’s death. The court system has set up a system called the Kaiser Formula which calculates each of the family members disbursement amount based on a mathematical formula.