Structured Settlement describes the process of settling claims using a qualified funding vehicle (a single premium structured settlement annuity or a trust fund which invests only in obligations of the United States Government) resulting in a customized stream of periodic annuity payments that are tailored to the plaintiff's particular financial needs. A structured settlement is an innovative settlement negotiating and planning tool, which, if effectively used, provides significant benefits to all parties in litigation. By agreeing to a structured settlement, plaintiffs can receive future periodic annuity payments free of income taxes on the plaintiffs, provided their claim qualifies under Sections 104(a)(1) and 104(a)(2) of the Internal Revenue Code.

A structured settlement is defined, under the Internal Revenue Code Section 5891(C) (1), as "an arrangement"—

    (A) which is established by (1) suit or agreement for periodic payment of damages excludable from gross income of the recipient under section 104(a)(2), or (ii) agreement for periodic payment of damages under any workers’ compensation law excludable from gross income of the recipient under section 104(a)(1), and

    (B) under which the periodic payments are (i) of the character described in subparagraphs (A) and (B) of section 130(c)(2), and (ii) payable by a person who is a party to the suit or agreement or the workers’ compensation claim or by a person who has assumed the liability for such periodic payments under a qualified assignment in accordance with section 130...

4structures.com, LLC hopes that you take the time to read the content of this web site to explore how a structured settlement may be used effectively for your case, or your client's case. Or simply call or even send us an email if you'd like, and we will be ready to answer your questions.