The section of the New York State General Obligations Law which sets forth certain required disclosures to be made by Defendant or Defendant's counsel when a structured settlement is created. Part of New York's Structured Settlement Protection Act.
The section of the New York State Obligations Law which sets forth required disclosures to be made by a factoring company, or purchaser of structured settlement payment rights, prior to entering into a structured settlement factoring transaction. Part of New York's Structured Settlement Protection Act.
Article 50A of New York's Civil Practice Law Rules (CPLR) deals with periodic payment of damages on medical, dental and podiatric malpractice cases.
New York's Periodic Payment of Judgment statutes. Article 50A of the Civil Practice Law Rules (CPLR) deals with periodic payment of damages on medical, dental and podiatric malpractice cases. Article 50B of the CPLR deals with payment of damages on personal injury, injury to property and wrongful death actions.
Article 50B of the New York's Civil Practice Law Rules ( CPLR ) deals with payment of damages on personal injury, injury to property and wrongful death actions.
529 Prepaid Plans
A tuition plan in which a payment is made now or over time at today's lower tuition rates, with the program then paying future higher tuition costs. Generally only available at state-owned colleges or universities.
529 Savings Plans
An account that allows money to be saved today and to grow tax-free if used for higher education. Each 529 Savings Plan must be sponsored by an individual state, and each state may provide some state tax benefits for state residents.
The signature of a clerk or attorney certifying that the person filing the document has sworn that the contents are
true, and/or that the document is signed by his or her free act and deed.
Also called a case or lawsuit. A civil judicial proceeding where one party sues another for a wrong done, or to protect a right or to prevent a wrong.
Activities of Daily Living
The following six are generally regarded as essential ADLs: bathing or showering, dressing, eating, getting in or out of bed or chairs, walking, and using the toilet. Inability to perform two out of the six ADLs is usually required in order to collect under a long term care (LTC) policy
Postponement of a court session until another time or place.
A decision or sentence imposed by a judge.
Adjusted Gross Income (AGI)
Gross income less allowable adjustments or deductions. It is the income which is used to calculate the taxes paid to the Federal Government.
Activities of Daily Living
The individual or institution appointed by a court to oversee the settlement of the estate of a person who has died without a will. A female administrator sometimes referred to as an Adminstratrix.
A written statement made under oath.
Declaring something to be true under the penalty of perjury by a person who will not take an oath for religious or other reasons.
A party appointed to act on behalf of a principal entity or person.
Adjusted Gross Income (AGI)
A landmark decision for plaintiff's rights by the United States Supreme Court on May 1, 2006, in which the Supreme Court unanimously affirmed the Eighth Circuit’s decision in Arkansas Dep’t of Health & Human Servs. v. Ahlborn, _U.S. _, 126 S. Ct. 1752 (2006). With this decision, a state’s Medicaid department is limited to reimbursement from only that portion of a judgment or settlement that represents payment for medical expenses. As a result of the decision, states are now prohibited from seeking reimbursement for Medicaid costs from settlement proceeds that were intended to cover items other than medical expenses, such as pain and suffering and lost wages.The Supreme Court held that the federal anti-lien statute prevents states from attaching the non-medical portion of a settlement or judgment. "Copy of Ahlborn Decision" from United States Supreme Court.
Stands for "American International Group" In structured settlement parlance it may be used to refer those members of American International Group family that issue structured settlement annuities (American General Life Insurance Company and United States Life Insurance company in the City of New York).
"Also known as". Used to list aliases or another name, or another spelling of a name used by a person.
Money a court requires one spouse to pay the other spouse for support
before and/or after the divorce is granted. If you do not ask for
alimony at the final hearing, you can never get it in the future.
Saying that something is true. The assertion, declaration or statement of a party in a case, made in a pleading.
Allstate International Assignments, Ltd.
A special purpose corporation which formerly accepted periodic payment obligations by way of non qualified assignments, including employment litigation settlements, environmental structured settlements , compromised workers compensation claims and Structured Sales transactions, contest prizes, lotteries, structured athlete endorsements, structured celebrity endorsement deals and others. It is resident in Barbados and its transactions are governed by the Taxation Treaty between the United States and Barbados.
Alternative Dispute Resolution
Also called ADR. Any method used to resolve disputes other than traditional
trial proceedings. For example, mediation. ADR programs speed up the disposition of civil cases.
Alternative Minimum Tax (AMT)
A Federal Tax, introduced in 1969, the aim of which is to ensure that wealthy individuals, estates, trusts and corporations pay a minimum level of income tax. For individuals, the AMT is calculated by adding the AGI to tax preference items. If you live in a state which falls within certain Federal Circuits, the AMT can be an issue for cases involving taxable damages, especially with respect to attorney fees. The issue may be mitigated by structuring fees.
Structured Settlement industry moniker for American General Life Insurance Company.
Alternative Minimum Tax (AMT)
Taking an item measured over a certain period and restating it on an annual basis
The individual named under an annuity contract who will serve as the measuring life for purposes of determining the benefits that will be paid under the contract.
Annuity Back Stop
An effective financial strategy employed when a measuring life has a very high rated age. Using a life only annuity with a deferred start date the annuity approaches pure insurance and represents a minimal percentage of the settlement. With the annuity as the backstop more cash can be paid up front to provide liquidity and/or invested . May also referred to as "annuity insurance back stop"
The life insurance company issuing the annuity that is used as "qualified funding asset" under a structured settlement, or the funding instrument in a "non qualified structured settlement". Sometimes referred to as "annuity carrier". The annuity issuer may offer other types of annuities, life insurance, disability insurance and other insurance products. Please click here to see Who Writes Structured Settlement Annuities and what are commonly referred to as Non Qualified Structured Settlements.
A court document, or pleading, in a civil case, by which the defendant responds to the plaintiff's complaint
A legal procedure in which the losing party requests that a higher Court review the lower court's decision
Money paid to the court while taking an appeal to cover costs and damages to the other party, if the appeal is not successful.
The official court form filed with the court clerk which tells the court that you are
representing yourself in a lawsuit or criminal case or that an attorney
is representing you.
The party appealing a decision or judgment to a higher court.
The party against whom an appeal is taken.
Submitting a case or dispute to designated parties for a decision, instead of using a judge.
Money for alimony and/or child support, which is overdue and unpaid.
Registered Trademark of 4structures.com, LLC
The person or entity to whom legal liability is transferred with respect to an obligation
Assistant Attorney General
An attorney who represents a state agency in civil cases.
A lien on property or assets to hold it to pay or satisfy any final judgment.
Attorney of Record
Attorney whose name appears in the permanent records or files of a case.
A decision made by a court to compensate a party for their claims
Refers to attorneys as a group.
BARCO Assignments, Ltd is one of several non-qualified assignment facilities in Barbados that enable the transfer of Taxable damages and other future periodic payment obligations in the resolution of claims, lawsuits or other disputes. According to the Notice of Financial Commitment issued with annuity contracts issued in conjunction with such non-qualified assignments (also known as non-qualified, taxable or tax-deferred structured settlements), Liberty Life Assurance Company of Boston, a shareholder of BARCO, will ensure that Barco has the minimum amount of net assets required to conduct business under Barbados law, and if at any time Barco has insufficient funds to make any required payment under the terms of any obligation it has to a creditor, Liberty Life will contribute to Barco the funds Barco needs in order to meet its payment obligations. A certificate of guarantee from Liberty Mutual Insurance Company assures the payment obligations of Liberty Life Assurance Company of Boston.
1/100 of 1 percent of yield. For example, the difference between 6.05% and 6.45% is 45 basis points or the difference between 6.05% and 6.06% is 1 basis point.
Any market in which prices are in a downward trend
Trial by a judge, rather than by a jury.
The person(s) or entity who receive a death benefit when the payee of the structure dies prior to the date upon which the annuity completes its payment schedule.
The rating that A. M. Best & Company assigns to insurance companies based on a company's ability to meet its policyholder obligations. Best assigns letters to rate the claims paying ability and a roman numeral to reflect the size of the company being rated. The highest rating category is A++XV (Superior).
In a structure context it refers to designing a cash flow to mimic a bond in which a series of payments are made followed by a deferred lump sum or balloon payment that is equal to the total cost of the structure.
Debt issued for a period of more than one year. Bonds may be sold by U.S. and local governments and agencies, corporations. The issuer of a bond is actually lending money to the bond purchaser in exchange for repayment over time.
Pricing a structured settlement annuity (or other payout annuity) off the structured settlement broker's or settlement planner's rate disk (in the era before computers rates were derived from a rate book and the name has stuck!). Sometimes book rates may be improved upon with a daily rate if spot bond rates in the open market are better than what the annuity issuer's actuaries priced into the book rate.
A written document prepared by a lawyer or party on each side of a dispute and filed with the court in support of their arguments.
Any market in which prices are in an upward trend
For tax purposes, a positive difference ("gain") between the purchase price and selling price of capital assets.
Capital Gains Tax
Tax assessed on a capital gain. If the asset was held for longer than one year the tax is 15%, if held less than one year ( a "short term capital gain"), then the tax is the same as the owner’s income tax rate.
For tax purposes, a negative difference ("loss") between the purchase price and selling price of capital assets..
The heading of a court pleading or document illustrating the names of the parties, the name of the Court and the docket or index number
A lawsuit or action in a court.
A meeting scheduled by the court to review the case.
Cash Now Pusher
An entity or individual that dangles the false expectation of instant cash to a tort victim as part of the under regulated structured settlement factoring sales process. It is a particularly cruel and predatory "bait and switch" because the sale of structured settlement payment rights requires court approval and may take 60-90 days if the Court approves. The unrealistic alternative is a federally mandated 40% excise tax on the "factoring discount" levied on the purchaser which will likely be passed on to the tort victim. May also be referred to as "financial crack" dealer due to the "addictive" nature of the transactions to some tort victims who keep coming back for more of their cash now "fix".
Certificate of Deposit
Certificate of Deposit
A time deposit issued by a bank indicating a specific sum of money to be deposited. The CD carries a specific rate of interest and has a specific maturity date of generally up to 5 years. Some CDs carry penalties for breaking them prior to the maturity date.
Certified Structured Settlement Consultant
A professional designation conferred by the National Structured Settlement Trade Association in cooperation with the University of Notre Dame after approximately 80 hours of coursework and successfully passing a comprehensive examination.
To testify in writing; to make known or establish as a fact.
Certified Financial Planner
Connecticut General Statutes
Charge to Jury
In trial practice, an address delivered by the court to the jury at the close of the case instructing the jury as to what principles of law they are to apply in reaching a decision.
All property except real property; personal property. For example jewelry, clothing, furniture, and appliances.
Chartered Financial Consultant
Any person under the age of sixteen (16) years of age.
Money paid by a parent to help meet the financial needs of a child.
The seminal US legal case on structured attorney fees
In civil cases, the statement of relief desired.
A legal complaint filed by a group of lawyers for a group of claimants who are "similarly situated" with respect to their claims
Chartered Life Underwriter
Laws that develop through case decisions by judges. Not enacted by legislative bodies.
Commutation/ Commutation Rider
On optional provision that can be added to a structured settlement annuity so that at the death of the annuitant, a lump sum payment is made in place of annuity payments. This option must be selected up-front at the time of settlement and must be carefully memorialized in settlement documents. The percentage of the payments that can be commuted can range from 1% – 100%. The life insurance company charges a fee for this option which typically is in the form of a reduced payout to the beneficiary. The amount of the discount and method to compute the discount varies by the life insurance company that issues the structured settlement annuity. A commutation rider may be mandatory where a Supplemental Need Trust is used in conjunction with a structure.
A legal document that tells the court what you want, and is served with a summons on the defendant to begin the case.
Interest paid on previously earned interest as well as principal.
Medicare has a responsibility to pay for covered medical expenses only after another insurer, who is deemed the primary payer, has made payment. The statute intentionally shifts the financial burden for covered medical expenses from Medicare to other insurers that Congress has determined must be primary payer. The Social Security Act prohibits Medicare from making payment if payment has been made, or can reasonably be expected to be made promptly by a third-party payer. If payment has not been made, or cannot be expected to be made promptly, Medicare may make a conditional payment, subject to reimbursement.
A critical element in the law of contracts, consideration is a benefit which must be bargained for between the parties, and is the essential reason for a party entering into a contract, such a structured settlement agreement and release. Consideration must be of value (at least to the parties), and is exchanged for the performance or promise of performance by the other party. In a contract, one consideration (thing given) is exchanged for another consideration. It is critical that the consideration for the settlement of a case that includes a structured settlement reflects the promise to pay the future structured settlement payments as part of the consideration.
A tax doctrine the gist of which is that a taxpayer, while not actually receiving funds, has them set aside, credited to an account, or otherwise made available, they are 'constructively received' and will be treated as taxable income. Income subject to substantial limitations or restrictions is not considered constructively received.Constructive receipt is fatal to a structured settlement or structured attorney fee.
Consumer Price Index
Measures the price of consumer goods and services and generally used to measure the pace of inflation in the United States
Contempt of Court
A finding that someone disobeyed a
court order. Can also mean disrupting court, for example, by being
loud or disrespectful in court
The adjournment or postponement of a court
case to another day.
A legally enforceable agreement between two or more persons or parties.
From the Latin word for body it refers to the principal amount in a trust, as opposed to income
Cost of Living Adjustment (COLA)
An optional feature that can be added to a structured annuity whereby the annuity payments increase at a fixed percentage compounded annually. While common industry vernacular the term "cost of living adjustment" is a bit of a misnomer since the actual cost of living is variable and may be higher or lower than the fixed percentage "COLA" elected as part of a structured settlement.
Expenses in prosecuting or defending a case in court. Usually does not include
The different parts of a complaint, which could each be a basis or grounds for the lawsuit.
Financial assets that are considered in the resource assessment for means-tested benefits such as Medicaid, and that are subject to resource limits.
A claim by the defendant in a civil action that the defendant is entitled to damages or other relief from
The person who maintains the official court record of your case. The court clerks’ office receives all court
papers and assigns hearing dates.
The person who records everything said
during the court hearing or deposition on a stenograph machine and prepares a written
record for a fee, if requested.
Consumer Price Index
New York's Civil Practice Law Rules.
Certified Structured Settlement Consultant
A court order deciding where a child will live and how decisions about the child
will be made. Parents may ask for any custody arrangement that they
believe is in the best interest of their child.
Special pricing of a structured settlement annuity (or other payout annuity) by the annuity issuer's actuaries. Sometimes book rates may be improved upon with a daily rate if spot bond rates in the open market are better than what the annuity issuer's actuaries priced into the book rate. Daily rates may be better or worse than book rates. Generally annuity issuers have a threshold above which daily rates are required.
Money a party receives as compensation for a legal wrong.
Date Slide Technique
A structured settlement lock in technique that aims to protect the plaintiff's benefit amounts when a structured settlement is desired, but a "wild card" exists that makes the funding date somewhat less predictable (e.g. Minor's Compromise, Wrongful Death Case, Cases involving Liquidation Bureaus, "Cat Funds" or government entities). Generally, when using this technique, settlement documents provide that if the anticipate funding date cannot be met then each of the payment dates may be moved the number of days between the anticipated and actual funding date. Especially critical in a decreasing or volatile rate environment.
An excluded amount that the insured must pay for covered claims made on an insurance policy. For example, if you have a $1,000 deductible you are responsible for the first $1,000 of a covered claim before the insurer pays.
In civil cases, the person who is given
court papers, also called a respondent. In criminal cases, the person
who is arrested and charged with a crime.
Deferred Income Annuity
A type of income annuity which enables you to purchase, with after tax cash today, a defined amount of income (for life or for a certain time period) to commence at a future date. It's a form of non qualified "defined benefit". The annuitant benefits from tax deferral on the interest on the consideration placed in the deferred income annuity. For more information The Deferred Income Annuity Blog may be a useful resource
Testimony of a witness taken, under oath,
in response to another partys questions. Testimony given outside the
courtroom, usually in a lawyers office. A word for word account
(transcript) is made of the testimony.
A formal request by one party in a lawsuit
to disclose information or facts known by other parties or witnesses.
A judge's decision to end the case.
Dismissal Without Prejudice
A judge's decision to end the case which permits the complainant or prosecutor to renew the case
later. In contrast, dismissal "with prejudice" prevents the complainant
or prosecutor to bring or maintain the same claim or action again.
Divorce Structured Settlement
Using a non qualified structured settlement to secure payments of alimony, child support to provide an income stream as part of equity distribution. Divorce Structured Settlements assure that payments for alimony or child support are On Time... Every Time™
Date of Birth. Often part of the question "What's your DOB?"
The permanent home of a person. A person may have several residences, but
only one domicile.
The person that receives the gift
The person that makes a gift
East West Diversification
Split funding the structured settlement program evenly across two or more structured settlement annuity issuers.
Economic Benefit Doctrine
The economic benefit doctrine holds that benefits should be taxed to when the are conferred. The economic benefit doctrine was first judicially applied to deferred compensation in Sproull v. Commissioner, 16 T.C. 244 (1951), aff'd, 194 F.2d 541 (6th Cir. 1952). In Sproull, a trust was created in 1945 for the benefit of a company president. The trustee was to pay half of the money to the president in 1946 and the remainder in 1947. The Tax Court ruled that economic benefit had been conferred to the president upon creation of the trust in 1945 because no contingencies for payment were involved and no one other than the employer had any control or interest in the money in the trust.
Effective Discount Rate
In a structured settlement factoring transaction, the effective discount rate is the rate a seller of structured settlement payment rights is effectively "paying" to the buyer in exchange for "cash now" AFTER taking into account all charges. In the context of a structured settlement factoring transaction, consumers need to beware of looking simply at the quoted discount rate, which is often quoted before charges. If you find yourself considering selling your payment rights, use the effective discount rate to evaluate the wisdom of selling your payment rights. You can use the effective discount rate to compare to other sources of capital.
Electronic Funds Transfer. Periodic payments may be made directly to your bank account. Funds are thereby available immediately so that you don't have to wait for the check to clear.
A person under the legal majority
age of 18 who is granted most rights and legal privileges of an adult
(C.G.S.§46b-150, et seq.).
When a lien, mortgage or restrain is placed on a property
Enhanced Structured Income
Enhanced Structured Income streams (sometimes referred to as "ESI ™") are fixed structured settlement annuity payment rights that have been sold at a significant discount to a third party purchaser. After the sale, the structured settlement annuity payment obligation remains in force and can be legally transferred to a new buyer through the purchase of ESI ™ . When ESI ™ is purchased, the buyer, often a Structured Asset Management trust, is legally transferred the rights to future fixed structured settlement annuity payments in return for a one time lump sum investment.
Enhanced Structured Income comes from a fixed annuity, one of the safest financial products available. The life insurance companies that issue structured annuity contracts, are strictly regulated by each state’s own department of insurance, which restrict how such companies invest monies they receive for future payment obligations, such as annuities and life insurance, so they can meet their future obligations. Enhanced Structured Income has competitive rates of return that rival variable products and can elevate the overall portfolio value given its relatively high returns in the fixed portion of the portfolio, whether alone or in combination with a traditional structured annuity. "ESI ™" is a trademark of Structured Asset management, with whom 4structures.com, LLC has a strategic alliance.
Watch Using Enhanced Structured Income for Improved Settlement Planning Solutions
A confiscatory tax imposed by the federal government (and several states) on the right to transfer property at death.
Done for, or at the request of, one side in a case only, without prior notice
to the other side.
The insurance policy (or policies) that responds to a claim when the limits of the primary policy are exhausted, or in effect a deductible has been satisfied. Sometimes referred to as an "umbrella" policy. May or may not be issued through the same insurance company that issued the primary policy.
Financial Resources that are not considered as a financial asset available to the individual when determining his or her eligibility for means-tested benefit programs such as Medicaid.
Factoring is the process of selling a structured settlement payee's rights to receive future payments from a structured settlement. The term "factoring" also applies to describe liquidating other types of future cash flows and accounts receivable.
Financial Accounting Standards Board
Federal Deposit Insurance Corporation
Federal Deposit Insurance Corporation
A Federal agency that insures bank deposits. Please note that annuities are not FDIC insured.
An individual or institution responsible for acting in the best interests of another party. A fiduciary is bound by law and has a duty to put aside personal interests and act in good faith when making decisions for the benefit of another.
Giving the court clerk legal papers which become part of the case file.
Financial Accounting Standards Board
A board composed of independent members who create and interpret so-called Generally Accepted Accounting Principles (GAAP)
A sworn statement of income,
expenses, property (called assets) and debts (called liabilities).
Financial Crack Dealer
A descriptive reference to the predatory solicitation tactics of certain factoring companies to tort victims with structured settlements and the "addictive" nature of what they are peddling to the unsophisticated or those with the propensity to squander their money who can;t get enough of the "fix". One factoring company promotes selling structured settlement payment rights to buy "baubles" like boats and $100,000 plus sports cars; another solicits such sales to get Christmas shopping money. Many sellers of structured settlement payment rights are repeat customers who cannot get enough of their "addiction". Many of these companies individuals or companies dangle the false expectation of instant cash to a tort victim as part of the under regulated structured settlement factoring sales process. It is a particularly cruel and predatory "bait and switch" because the sale of structured settlement payment rights requires court approval and may take 60-90 days if the Court approves. The unrealistic alternative is a federally mandated 40% excise tax on the "factoring discount", levied on the purchaser, which will likely be passed on to the tort victim.
The court’s or jury’s decision on issues of fact.
In a structured settlement transfer context, forum shopping occurs when a seller of structured settlement payment rights is encouraged by the buyer or the buyer’s agent to seek out the most favorable jurisdiction to file the transfer petition. Jurisdiction refers to the right of a court to hear a given case. The problem occurs when the selling annuitant plied with financial incentives by the settlement purchaser, attempts to claim a domicile in a state where he or she does not in fact reside. Hastily obtained voter registration cards, nominally funded bank accounts and other items may be used to "prove" domicile. Forum shopping is discouraged by rules of civil procedure but is not entirely eliminated. The danger is that the seller and purchaser may engaging in unlawful activity. If the structured settlement transfer is deemed to be not in compliance with the state’s structured settlement protection act and thereby not in compliance with the federal statute, the transaction could be invalid and the settlement purchaser could be subject to a 40% excise tax on the factoring discount.
Tax imposed by federal or state government on an asset transferred as a gift to individuals
A bond issued by the UK government. Gilts are the UK equivalent of a U.S. Treasury security. Name from the gold ("gilt") edged borders of the original bond certificates.
The creator of a trust
A complaint filed against an attorney or judge, claiming an injury or injustice.
Payments to be made whether or not the annuitant survives the entire payment schedule
An individual or institution named by a court to manage the property of a person who is judged incapable of handling his or her own affairs.
Guardian Ad Litem
A court appointed individual who is responsible for making sure the best financial interests of the minor or incapacitated adult are met in a legal proceeding. The scope of the authority is determined by the Court.
The qualified assignment company utilized for structured settlements placed with Hartford Life Insurance Company. CEBSCO, domiciled in the State of Connecticut, stands for Comprehensive Employee Benefit Service Company and is an affiliate of Hartford Life Insurance Company.
An apparently free choice that offers no real alternative. e.g. "You can have any color (Model T) as long as its black" Henry Ford
Irrevocable Life Insurance Trust
Impaired Risk Annuity
Registered Trademark of 4structures.com, LLC
To reimburse or pay for incurred loss
Index Linked Annuity Payment Adjustment Rider (ILAPA)
Index Linked structured settlement annuity rider offered by Pacific Life Insurance Company (Pacific Life and Annuity Company is the annuity issuer for Pacific Life in New York state). Payments adjust annually on the contract anniversary based on the year over year changes in the S&P 500 between yearly measuring points, with a 5% cap. No downside risk. If the S&P 500 is down between the measuring points, the payments remain at the same level. Only available for income streams, not lump sums. Pacific Life has obtained a favorable iRS Private Letter Ruling to support its Index Linked Annuity Payment Adjustment Rider.
Index Linked Structured Settlement
A type of structured settlement in which structured settlement payments increase annually if there are positive changes in the Standard & Poors 500 (S&P 500) between two annual measuring points (point to point) with a cap of 5%. Payments will not reduce if the S&P 500 goes down between the two annual measuring points. The first adjustment would be effective on the contract anniversary and subsequent adjustments would occur on future contract anniversaries. Only structured settlement income payments are eligible. Can be used for structured settlements paid to the plaintiff or for structured attorney fees.
When the prices of goods and services rise, causing the purchasing power of your dollar to decline.
As defined in the Internal Revenue Code Section §453, "a disposition of property where one payment is to be received after the close of the taxable year in which the disposition occurs"
Interest rate risk
The risk associated with changes in levels of interest rates
Internal Rate of Return
Allows you to find an interest rate that is equivalent to the returns (on the amount of premium) that you expect from your structure. Once you know the rate, you can compare it to other rates that you could earn by investing in other plans and determine the best value for your money. Care should be taken when understanding how the IRR is calculated in a structured settlement proposal when there is an annuitant with reduced life expectancy. For more detail click here
Internal Revenue Code
Various statutes and regulations making up Federal tax law in the United States of America.
Internal Revenue Service
The federal agency responsible for the collection of federal taxes on income, social security, gift, estate and excise taxes.
Laws governing the distribution of your property if you die without a will. If you die without a will you are said to die "intestate".
Internal Revenue Code
A statute created under the Deficit Reduction Act of 1984 which affects the timing of the tax deduction taken by taxed self insured companies. IRC461(h) allows tax deductions only when "economic performance" occurs. In other words for self funders, the deduction is possible only as payments are made to the plaintiff. Previous practices by self insured were deemed abusive in that some self insureds, using a method of accrual accounting, were taking deductions for the total of future pay outs in the year of the settlement.
Internal Rate of Return
Irrevocable Life Insurance Trust
A trust that is created to own a life insurance policy. If properly structured, the death benefits paid to the trust on the insured's death will not be included in the gross estate of the insured. Various forms of life insurance can be used for a single insured, or for multiple insureds (e.g. husband and wife with a second to die policy)
A trust you can't revoke or terminate and have given up the right to amend, alter, change or retrieve the assets placed into it. Generally used to save estate taxes or protect against the claims of creditors. Often used to own one or more life insurance policies.
Internal Revenue Service
IRS Form 6252
This form is required by the IRS to report Installment Sale income and is attached to your US tax return.
John Hancock Assignment Company
The qualified assignment company utilized for structured settlement annuities placed with John Hancock Life Insurance Company. Sometimes referred to by the acronym "JHAC". JHAC is domiciled in the State of Connecticut.
Justice of the Supreme Court (New York)
A ruling or order of the court
Kenmare Assignment Company, Ltd.
A Dublin, Ireland based independent assignment company (unaffiliated with any insurance company) formed for the purpose of accepting periodic payment obligations such as structured contingent attorney fees, structured sale transactions, like kind exchange (§1031) fallback transactions, professional athlete and celebrity endorsement fees, employment litigation settlements and other non-personal physical injury tort settlements. All obligations will be 100% transparent to clients (24/7 access) via the web with funds held in separately managed custody accounts with JP Morgan Chase or the Royal Bank of Canada. KACL operates subject to Irish government approval and it’s transactions are regulated and governed by the 1997 Taxation Convention with Ireland dated January 1, 1998 (US/Ireland Tax Treaty).
KACL has contracted with Allied Irish Bank (AIB) to perform all back office services of KACL, including accounting/reporting, cash management, compliance and all other required activity. Ernst & Young has issued a SAS 70 for AIB’s "back office" services. Statement on Auditing Standards (SAS) No. 70, Service Organizations, is a widely recognized auditing standard developed by the American Institute of Certified Public Accountants (AICPA).
A form of insurance protection, which will pay sums that the insured is legally obligated to pay for, or which the insurer agrees to pay to settle a claim, as damages to others resulting from the insured's negligence. Typically encompasses damages for bodily injury and damage to property.
Any official claim against property or funds for payment of a debt or an amount owed for services rendered.
Life Care Plan *
A dynamic document based upon published standards of practice, comprehensive assessment, data analysis and research, which provides an organized concise plan for current and future needs with associated costs, for individuals who have experienced catastrophic injury or have chronic health needs
*Combined definition of the University of FLA/Intelicus at the 2nd annual Life Care Planning conference and the International Academy of Nurse Life Care Planners, presented at the Forensic Section meeting, NARPPS Annual Conference Colorado Springs and agreed upon April 3, 1998
Life Contingent Payments
An annuity payment option that makes payments if the annuitant is still living. A 30 years certain and life annuity with monthly payout becomes "life contingent" after 360 monthly payments.
An annuity payment option that makes payments for the remainder of the annuitant's life, regardless of the length of time.
A legal document in which an individual states, in advance of final illness or injury, his or her wishes regarding procedures and equipment designed to extend life.
Liability Medicare Set Aside Arrangement
Loss of Consortium
The inability of one's spouse to have normal marital relations.
Lump Sum Annuity
An annuity designed to make a single payment on a specified future date or series of balloon payments on specified future dates
This is an important deduction available to a married couple for reducing the tax on lifetime gifts or transfers at death. The deduction is unlimited and can therefore potentially eliminate the federal estate tax on any size estate. It is allowed for the net value of property passing outright (or the equivalent of outright) or in a manner that meets rigid statutory guidelines.
The sum of observed data divided by the number of observations (For example 2+2+3+3+5 equals 15; 15 divided by 5, the number of observations, equals 3)
Means Tested Programs (Means-Tested Programs)
Public benefit programs, like SSI and Medicaid, that have eligibility limits for income and financial assets.
An informal and confidential way for people to resolve disputes with the help of a neutral mediator who is trained to help people discuss their differences. The mediator does not decide who is right or wrong or issue a decision. Instead, the mediator helps the parties work out their own solutions to their dispute.
A joint federal/state program providing medical assistance to eligible needy persons, under which medical services are delivered by participating providers and reimbursed according to state formulas.
Medicare (Title XVIII)
A federal program for the elderly and disabled, regardless of financial status. Unlike with Medicaid, it is not necessary for Medicare recipients to be poor. A USA health insurance program for people aged 65 and over, for persons eligible for social security disability payments for two years or longer, and for certain workers and their dependents who need kidney transplantation or dialysis. Monies from payroll taxes and premiums from beneficiaries are deposited in special trust funds for use in meeting the expenses incurred by the insured. It consists of two separate but coordinated programs: hospital insurance (Part A) and supplementary medical insurance (Part B).
Medicare Approved Charge
The amount Medicare approves for payment to a physician. Generally, Medicare pays 80 percent of the approved charge and the beneficiary pays the remaining 20 percent. Physicians may bill beneficiaries for an additional amount (the balance) not to exceed 15 percent of the Medicare approved charge.
Medicare Secondary Payer
The term used by Medicare when Medicare is not responsible for paying first. (Also referred to as "Coordination of Benefits" by the insurance industry when assigning responsibility for first and second payment.)
Medicare Set Aside
The recommended method to protect Medicare’s interest in a settlement. A Medicare Set-Aside (MSA) arrangement is a document that specifies future injury-related medical needs and associated costs. Medicare-covered expenses are identified and costs are based upon what would ordinarily be paid by Medicare within the beneficiary’s state of jurisdiction. Based upon the MSA projection, part of a settlement award is “set-aside” in order to pay for the costs of future care which would ordinarily have been paid by Medicare. A structured annuity is a cost effective method to fund an MSA.
Medicare Set Aside Trust
A bond issued by a state or county, city, town or village. Generally the interest paid on many municipal bonds is exempt from federal income taxes and on state and local taxes in the state of issue.
Nabco Assignments, Ltd.
NABCO Assignments, Ltd.
A special purpose corporation formed for the purpose of accepting periodic payment obligations by way of non qualified assignments, including employment litigation settlements, compromised workers compensation claims and Structured Sales transactions and others. It is resident in Barbados and its transactions are governed by the Taxation Treaty between the United States and Barbados. It is registered with the IRS and holds a US Tax ID number. Please note that as of March 1, 2007 the company became known as Allstate International Assignments, Ltd.
National Alliance of Medicare Set Aside Professionals.
National Structured Settlement Trade Association
A trade association of over 500 members who are financial professionals and product providers whose goal is to advance the use of structured settlements as a means to resolve personal injury, workers' compensation and other types of claims
Net Present Value
The present day value of a series of future cash flows using a specified discount (interest) rate and is a method to evaluate different financial proposals. The amount of cash today that is the equivalent in value to a stream of payments to be made in the future
New York Life Insurance and Annuity Corporation
A Delaware Corporation, "NYLIAC" is the assignee used for structured settlements placed with New York Life Insurance Company as the annuity issuer
New York State Medical Indemnity Fund
A fund to provide a funding source for future health care costs associated with birth related neurological injuries, in order to reduce premium costs for medical malpractice insurance coverage. The New York Medical Indemnity Fund was established by New York State Legislature by an amendment to New York Public Health Law 29-D and will apply to all birth-related neurological injury lawsuits where no judgment has been entered and no settlement agreement has been entered into by the parties before April 1, 2011. "Birth-related neurological injury" is defined under the statute as "…an injury to the brain or spinal cord of a live infant caused by a deprivation of oxygen or mechanical injury occurring in the course of labor, delivery or resuscitation or by other medical services provided or not provided during a delivery admission that rendered the infant with a permanent and substantial motor impairment or with a developmental disability" as that term is defined in the Mental Hygiene law. The fund is sometimes referred to as the Neurologically Impaired Infant Fund, or NIIF.
National Indemnity Company, a Berkshire Hathaway subsidiary that issues periodic payment reinsurance.
Non qualified assignment
A deferred payment mechanism that provides an alternative solution for the settlement of taxable damages, structured attorney fees, employment settlements, environmental settlements, divorce settlements, structured installment sales, a 1031 Exchange Fallback. Because there is no IRC 130 exclusion to the corporate owner, such facilities are typically found offshore, in Barbados or Ireland where the advantages of international tax treaties between those countries and the United States can be maximized.
Non qualified structured settlement
Refers to periodic payment settlements for matters that do not involve personal injury, or the portion of a physical injury case which involves taxable damages (e.g punitive damages).
Normal Life Expectancy
The age to which a person is expected to live from his/her current age. Based on various statistical analyses and used by insurance companies to set prices and to make benefit projections. The normal life expectancy measure may vary depending on the study with the older studies or mortality tables (e.g. the 1983 CSO) showing a shorter normal life expectancy. The Normal Life Expectancy is used in the calculation program for the structured settlement IRR. With respect to such calculations consumers and attorneys should always ask what Normal; Life Expectancy has been assumed to assure "apples to apples" comparisons between plans.
North South Diversification
Split funding the structured settlement program across two or more structured settlement annuity issuers in segment chain so that a new payment stream one carrier starts when the payment stream from the prior one finishes. For example annuity issuer A might take Years 1-10, issuer B Years 11-20 and issuer C Years 21-Life. Generally a more highly rated annuity issuer or issuers would carry the end of the chain.
The act of a notary public witnessing a person signing a document; many legal documents require a notarized signature
A person authorized by the state where the signature is being made to witness the signature on certain legal documents
National Structured Settlement Trade Association
Stands for New York Life Insurance and Annuity Corporation. A Delaware Corporation utilized, among other things, as the qualified assignment company for structured settlements placed with New York Life Insurance Company.
The person or entity that owes money as a result of an agreement or judgment
On Time Every Time®
A registered trademark of 4structures.com, LLC
One Party Release
A settlement agreement or release that is executed only by the releasing party. Also known as a single party release.
P.L. 97-143 The Periodic Payment Settlement Act of 1982
The Periodic Payment Settlement Act of 1982
The Period that structured settlement or income annuity payments will be paid whether or not the plaintiff/payee/payment recipient dies prior to the completion of the Period. It is sometimes referred to as the "guarantee period". For example: $1,000/month for 10 years certain means that the income will be paid to the (or in the case of death, the beneficiary) for a total of 10 years whether or not the plaintiff/payee/payment recipient lives or dies. Sometimes the annuity is expressed as "x years certain and life", or life with x years certain" in which case the same applies until the end of the period certain after which payments become life contingent and are only paid if the annuitant is living.
Periodic Payment Reinsurance
Periodic Payment Reinsurance is an effective non qualified assignment alternative that can be used to resolve taxable damage cases, as a means to do policy buyouts, and as an alternative method to structure attorney fees where a plaintiff or attorney is not comfortable with non qualified assignments. Periodic Payment Reinsurance is only available where the paying party is an insurer.
Periodical Payment Order
An order of the Court in the United Kingdom imposing periodical payments.
What they call "periodic payments" in the United Kingdom. The Courts Act of 2003 effectively enables the Court to order periodical payments without the consent of the parties
In wrongful death cases, this concept is the process of pooling household income together and subtracting what the decedent would have consumed, but for his or her death. The personal consumption is based on household size and has been adopted by many states.
PL 97-143 The Periodic Payment Settlement Act of 1982
The Periodic Payment Settlement Act of 1982
A person or entity that brings a legal action and is seeking damages from another party
Pacific Life And Annuity Services, Inc. or PLASI is the qualified assignment company for structured settlements placed with Pacific Life and Annuity Company. Domiciled in the State of Colorado, PLASI is a wholly owned, non-insurance subsidiary of Pacific Life Corp. Structured settlement obligations assigned to PLASI are subject to a Statement of Irrevocable Guarantee from Pacific Lifecorp, a stock holding company.
The court documents filed with the court by
the parties in a civil or criminal case. For example motion to dismiss;
motion for modification.
Point to Point
An equity index annuity crediting option. In a structured settlement context, the structured settlement payment increases by simply determining the growth in the Standard & Poors 500 (S&P 500) from one point to another. The first point is generally the S&P 500 value when payments begin with the next measuring point as the last S&P 500 value one year from the first measuring point. An annual point to point contract allows for the previous year's market performance to not affect the performance of the account in future years. Adjustments are made on a yearly basis. In years in which the S&P 500 increases in value, structured settlement annuitants with an index-linked structured settlement participate in some of that growth. In 2014, the index participation cap is 5%. When the market is down for the year, rather than decrease the structured settlement payment, the payment amount simply stays the same. This allows you to protect your structured settlement payments, but also participate in years in which the market is up.
The maximum amount to be paid on an insurance policy for a covered claim.
The Program Operations Manual System for the Social Security Administration. The POMS is the primary source of information used by Social Security Administration employees for social security benefits.
Pooled Income Trust
A form of Special Needs Trust that is managed by a charity or other nonprofit organization. Each beneficiary has a separate account. However, trust assets are pooled for investment and management of funds. The payback requirement is waived to the extent that assets in the trust are left in the trust upon the beneficiary's death.
A type of special needs trust authorized by Federal Law whose assets don’t count for purposes of qualifying for needs based public assistance (Medicaid or SSI). With a pooled trust, the trustee is a non-profit or charity. The funds in the trust are "pooled" for investment purposes, but each member of the pooled trust has a separate account. The pooled trust retains the money left in the trust at the death of the member of the pooled trust which avoids the requirement for special needs trusts that Medicaid be repaid at death. Also known as a D4(c) trust.
Any request to a court or action by a
judge after a judgment in a case.
To pay the court ordered bond amount with
cash or property.
Present value is the value on a given date of a future payment or series of future payments, discounted to reflect the time value of money and investment risk. Present value is used in business and economics to provide a means to compare cash flows at different times on a meaningful "like to like" basis. It is extensively used in calculations made structured judgments pursuant to New York CPLR 5031-5039 (Article 50A) and CPLR 5041-5049 (Article 50B).
The first policy to respond to an insurance claim
The Proportionately Reactive Investment Management System is a computer program designed for the risk averse investor, patented by Richard G. Halpern (US 7,149,714 B1) which implements the investment philosophy of "Buy Low Sell High" through a systematic accumulation and liquidation of shares in direct proportion to the movement of the price of the shares, as measured against a linear target.
A Latin phrase meaning for "yourself"--representing yourself in any kind of case.
Promise to Pay
A mandatory requirement of the documentation for any structured settlement setting forth the periodic payment obligation of the paying party. This obligation is subsequently transferred via a qualified assignment. However, without the initial promise to pay there is no structured settlement.
A formal written document required by law to sell certain securities that contains information that an investor needs to make an informed decision. In a structured settlement context, a prospectus is delivered in conjunction with the presentation of a variable structure by a structured settlement broker who is properly registered to sell securities through a broker-dealer. The prospectus may include fund objectives, an explanation of risks, costs and other essential information.
Pruco Assignments Corporation
A special purpose corporation formed in 2006 for the purpose of accepting periodic payment obligations by way of non qualified assignments, including employment litigation settlements, divorce settlements, punitive damages, allocation of interest, compromised workers compensation claims transactions and more. Assumed obligations are guaranteed by The Prudential Insurance Company of America. Pruco Assignments Corporation suspended accepting new non qualified assignment business effective June 30, 2009.
Qualified Settlement Fund
A settlement planner or structured settlement broker whose practice is overly reliant on the use of IRC 468B Qualified Settlement Funds involving a single claimant and/or whose client recommendations to use an IRC 468B Qualified Settlement Fund are so abundant in number that expert testimony could question whether the motivation behind using them is more to benefit the tort victim, or the settlement planner themselves.
An assignment of obligation to make future periodic payments which satisfies the requirements of Internal Revenue Code (IRC) § 130. In a structured settlement agreement the original obligor (the defendant, insurance carrier for the defendant, or the trustee of a qualified settlement fund, assigns its obligation to make the future periodic payments called for in the settlement agreement to a "qualified assignee". Generally these are special purpose companies. A qualified assignment company may actually be an insurance company itself. The qualified assignment company is usually related to the life insurance company issuing the structured settlement annuity. The assignee company typically purchases an annuity from the related life insurance company. A qualified assignment requires the plaintiff's consent.
Qualified Funding Asset
The type of asset that can be utilized by a qualified assignment company, pursuant to Internal Revenue Code (IRC) § 130, to fund the future periodic payments (structured settlement payments) called for in the settlement agreement and release or court order. Generally Internal Revenue Code (IRC) § 130 only permits the use of a structured settlement annuity issued by an insurance company, or obligations of the United States government, to serve as a qualified funding asset.
An employee benefits plan that meets the requirements of IRC 401a and for which employer contributions are tax deductible.
Qualified Settlement Fund
Another way of expressing the term
"rated age" . The rate-up is the a number of years which are added to the actual age of the measuring life when pricing a structured settlement annuity, structured sales annuity, deferred income annuity or other lifetime income annuity. Please note that a period certain or term certain , is not affected by a rate-up or rated age.
Certain medical conditions and injuries can result in a "rated age" or "impaired risk rating" when an underwriter at an annuity issuing life insurance company estimates that, due to these conditions/injuries, the annuitant may not live a normal lifetime and it is therefore willing to accept the risk of providing lifetime payments at a lower annuity premium cost than would otherwise be required. The annuity is quoted at the rated age, as if the annuitant's age is the rated age instead of the annuitant's actual age. For more details on rated ages, see Rated Age and Impaired Risk Ratings.
Rating agencies provide formal opinions with regard to an insurance company that are of importance in measuring how effectively and profitably a particular company is likely to perform in the future and/or meet its obligations. The major rating agencies are A.M. Best &Co., Standard & Poors (S & P), Fitch, Moodys and Weiss Research. There may be a difference in approach between rating agencies but factors generally considered include company profitability, liquidity, investment strategy, surplus position, business practices and capability of management. Companies pay to get rated by all agencies with the exception of Weiss Research.
The initial and ongoing process of managing a plaintiff's financial recovery. A properly designed plan for the management of a plaintiff's recovery mitigates the need to liquidate fixed periodic payments through factoring and reduces the chances that the plaintiff's recovery will be squandered.
Registered Settlement Planner
As set forth on the Texas Tech University web site , "The Registered Settlement Planner Program is a product of collaboration between the Registry of Settlement Planners Board (RSP Board) and Texas Tech University’s Personal Financial Planning Division. The coursework is rigorous and compares to graduate-level work. It is designed for people who have made a serious commitment to the field of comprehensive settlement planning. The program consists of three courses taken over a one-year period. Successful completion of the first two courses is required to meet the education requirement of the RSP designation. The third course is an optional case studies course designed to provide instruction on the creation of a comprehensive settlement plan that will meet the RSP Board’s rigorous standards".
Money ordered to be paid by the defendant
to the victim to reimburse the victim for the costs of the crime.
Generally making good, or giving the equivalent for any loss, damage or
injury caused by a persons actions. Often a condition of probation.
Retail Prices Index
The Retail Prices Index, or "RPI", is the average measure of change in the prices of goods and services bought for the purpose of consumption by the vast majority of households in the United Kingdom. It is compiled and published monthly. The RPI is a critical tool for economists, business and government. It is used for the indexation of pensions, state benefits, wage agreements, maintenance, child support payments and benefits subject to a periodical payment order are often linked directly to the RPI.
Rev. Proc. 93-34
Deals with Qualified Settlement Fund as an assignor in structured settlement transactions. Click here to download a copy of Rev. Proc. 93-34
Revenue Ruling 79-220
The precedent setting IRS revenue ruling which set forth the prerequisites to receive an income tax exclusion for settlements including periodic payments. Click here to download a copy of Rev. Rul. 79-220
Revenue Ruling 82-122
This ruling answered the question of whether the substitution of a new obligor and a change in the rate of interest would be considered a satisfaction or disposition of an installment obligation within the meaning of IRC§453B(a). The ruling held that the increase in the amount paid monthly to reflect the higher interest rate on an installment obligation coupled with the substitution of a new obligor does not constitute a disposition of the installment obligation within the meaning of IRC §453B(a)
The quantifiable likelihood of loss or less-than-expected returns. The variability of factors which affect a plaintiff/investor/decision-maker. Some examples of risk that affect Plaintiffs and Defendants include interest rate risk, credit risk, financial risk, event risk, duration risk, economic risk, inflation risk, country risk. Plaintiffs, Defendants and their attorneys consider the risk of possible trial outcomes which is partly the reason for many out of court settlements.
Retail Prices Index
Registered Settlement Planner
Rule of 115
A rule of thumb which says that if you take any number, representing the yield on a lump sum investment, and divide it into the number 115, the result will tell you the approximate number of years that it will take for the investment to triple. Example: if you are considering an investment that pays 6%, it will triple in 19.2 years (115 divided by 6)
Rule of 72
A rule of thumb which says that if you take any number, representing the yield on a lump sum investment, and divide it into the number 72, the result will tell you the number of years that it will take for the investment to double
Example: if you are considering an investment that pays 6%, it will double in 12 years (72 divided by 6)
Places the claimant above general creditors in the event of a qualified assignment company insolvency through the set aside of assets by the payor. Thus the qualified assignment company's other creditors cannot use the assets to satisfy their claims against the qualified assignment company. A structured settlement can be funded via a structured settlement annuity or US government obligations so it is these assets that would be pledged.
The legal method for giving a copy of the court papers being filed to other parties in a case.
A legal instrument executed by parties to a lawsuit or claim which states the case facts and the terms by which the Plaintiff//Claimant is releasing the Defendant/Respondent
An annuity featuring customizable cash flows, allowing for one or more payment streams, that may be of the type used as a "qualified funding asset" pursuant to IRC 130(d) (see Structured Settlement Annuity), or as the funding vehicle for a non qualified assignment
Evaluating the investment and financing options available to a claimant and/or his/her attorneys. Planning includes helping the Claimant and/or his attorneys make optimal decisions, considering the consequences of these decisions in the form of a settlement financial plan and then comparing future performance against the plan.
A financial professional who helps to design the optimal plan for distribution of a claimant's settlement proceeds and to guide the individuals and/or their attorneys through the plan and its implementation.
Settlement Preservation Trust (SPT)
An irrevocable spendthrift trust, for injury victims, that can be used alone or in conjunction with a structured settlement to protect their settlement proceeds. Sometimes referred to as a Settlement Planning Trust, Recovery Management Trust or Settlement Conservation Trust.
Settlement Purchasing Industry:
Describes the secondary market for structured settlement payment rights. Collectively, the companies, firms, their agents and employees who engage in the purchase of the rights to structured settlement payments and other periodic payments. The major participants in the settlement purchasing industry are members of the National Association of Settlement Purchasers (NASP). It is important to note the distinction between the purchase of a structured settlement annuity and the purchase of rights to receive structured settlement payments. A settlement purchaser does not buy structured settlement annuities, it buys the rights to the structured settlement payments.
Interest is only paid on the principal amount
Special Needs Trust
Supplemental Needs Trust
Special Needs Trust
A trust designed to care for an injured party's special (supplemental) needs so as not to disqualify the beneficiary from eligibility for SSI and Medicaid. Known as Supplemental Needs Trust in the State of New York.
A written agreement to split commissions and production credit on the placement of a structured settlement annuity among two or more licensed insurance agents or brokers . Such agreements generally provide that each party works on behalf of their own client and that commissions are paid directly from the annuity issuer(s).
(in the structured settlement context) a person, group, organization, or system who affects or can be affected by structured settlements
A measure of dispersion of a set of data from its mean
A law enacted by a legislative body.
Also called a "stip." A written agreement by the parties or their attorneys.
Structured Assignments, Inc.
As an alternative to annuities, Structured Assignments Inc. provides enhanced security with U.S. Government Obligations Held in a Periodic Payment Trust with Midwest Trust in Overland Park, KS.Formerly known as Treasury Funded Structured Settlements International, or TFSS-I is one of several non-qualified assignment facilities in Barbados.
Structured Celebrity Endorsement Fee
Periodic payment of celebrity endorsement fees in a manner that benefits both the endorser and the endorsee. Structured endorsement fees are funded with a non qualified structured annuity and assurance of payment by one of America's largest life insurers. The structured endorsement fee process effectively deals with the question of "who owns the annuity"?
An installment sale agreement is entered into between buyer and seller of property, or a business, in which the buyer agrees to pay cash plus a promise to pay future periodic payments. The buyer assigns his/her/its liability to make the periodic payments to a non qualified assignee and transfers a certain amount of cash to the assignee which then purchases an annuity contract from a life insurance company to fund its obligation.
Structured Sales Authority
A web log dedicated to issues related to disposition of businesses and real estate using the structured installment sales method. Located at www.4structuredsales.com
Defined under IRC Section 5891(c)(1) as " an arrangement which is established by
(i) suit or agreement for the periodic payment of damages excludable from the gross income of the recipientunder IRC Section 104(a)(2), or
(ii) an agreement for the periodic payment of compensation under any workers' compensation law excludable from the gross income of the recipient under section 104(a)(1), and under which the periodicpayments 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 to 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.
Note: It is important to recognize that the language immediately prior to Internal Revenue Code Section 5891(c)(1) states that the definition that appears there is "for the purposes of this section". Internal Revenue Code Section 5891 entitled "Structured Settlement Factoring Transactions" which deals with the excise tax imposed on the "factoring discount" (see IRC 5891(c)(4)), when there is a purchase of structured settlement payment rights and the exceptions to the excise tax. A number of structured settlement industry commentators have been observed attempting to broaden the express language that appears in the Internal Revenue Code.
Structured Settlement Addendum
An Exhibit to a "one party" release that sets forth the terms and conditions of a structured settlement.
STRUCTURED SETTLEMENT AFFIDAVIT
A form of transparency used by certain structured settlement broker and settlement planners which contains a series of affirmative written representations and warranties.
Structured Settlement Annuity
An annuity featuring customizable cash flows, allowing for one or more payment streams, that is used as a "qualified funding asset" pursuant to IRC 130(d). A structured settlement annuity is offered only through specialized agents and/or brokers and their affiliates who are appointed or authorized to use the software of, and distribute structured settlement annuity quotes by, the life insurance companies that issue structured settlement annuities.
Structured Settlement Broker
An individual possessing specific expertise, and one or more state insurance licenses, who places structured settlement annuities which are used as a "qualified funding asset"
when a structured settlement is part of the resolution of a claim or litigation. Most active structured settlement brokers are members of the National Structured Settlement Trade Association (NSSTA).
Structured Settlement Company
A company that engages in the marketing and placement of new structured settlement annuities, which are regulated insurance products. Included in the definition of a structured settlement company are companies that have employees or, who have independent licensed life insurance agents and brokers, whose primary business is to place structured settlements. There even once was a structured settlement annuity brokerage firm called "The Structured Settlement Company". The term "structured settlement company" is sometimes used to refer to certain life insurance companies who manufacture or issue new structured settlement annuities. Some settlement transfer companies, settlement purchasers or "cash now" companies, have tried to favorably position themselves by incorrectly using this term. However make no mistake, none of them can truly make the claim that they are a "structured settlement company."
Structured Settlement Factoring Company:
A company that engages in the purchase of the rights to receive future structured settlement payments. A transaction completed by such companies is known under the Internal Revenue Code Section 5891 as a 'structured settlement factoring transaction". Sometimes referred to as a "secondary market company" "settlement purchaser" , "cash now company", "cash flow purchaser", "transfer company" or "factoring company". Sometimes mislabeled in advertising by such settlement purchasers as a "structured settlement company". Don't be confused!
Structured Settlement Factoring Transaction
Describes a process, defined at IRC 5891(c)(3)(A), which results in the transfer of structured settlement payment rights for a discounted amount of cash. Don't believe the marketing hype! A structured settlement factoring transaction IS NOT a structured settlement transaction.
Structured Settlement Funding
The act of funding a structured settlement transaction by a qualified assignment company, defendant or liability insurance company.
Structured Settlement Industry:
Describes the primary market for structured settlements. Collectively, the companies and brokerage firms, agents and brokers who engage in the creation of structured settlements. The majority of participants in the structured settlement industry are members of the National Structured Settlement Trade Association (NSSTA).
Structured Settlement Payment Rights
Property rights created with the structured settlement. Such rights may be transferred subject to the terms of the settlement documentation in accordance with IRC 5891 and applicable state law.
Structured Settlement Quote:
A primary market quote, through a licensed insurance agent or broker, which sets forth (i) the benefits that can be purchased for a given amount of consideration or (ii) the price to fund a certain known benefit stream or multiple benefit streams. A structured settlement annuity is an insurance product which requires proper licensing to quote. A quote for a structured settlement factoring transaction is often mislabeled in advertising by settlement purchasers as a structured settlement quote. Don't be confused by what you see on the Internet! If you already have a structured settlement, a quote to purchase the rights to receive the payments from your structured settlement is not a structured settlement quote. It is a factoring or transfer quote.
Structured Settlement Servicing Agreement
A controversial agreement that is executed to permit a third party to service structured settlement annuity payments. It is used when a partial transfer of structured settlement payment rights occurs and, allegedly, the structured annuity issuer refuses to split payments between the factoring company and the annuitant. In such cases the full amount of the annuity payment (i.e. including the unsold portion!) is transferred to the servicing factoring company. The servicing company cashes the check, takes its cut and then passes the rest through to the annuitant. Some have suggested that the procedure is merely used as a device to warehouse prospects for future sales of structured settlement payment rights. Before entering into such agreements annuitants should be clear that if the factoring service company goes into Chapter 7 bankruptcy there could be additional legal costs to the annuitant to go along with emotional anguish. Issues concerning structured settlement servicing only arise when payment rights are sold.
Structured Settlement Transaction
Describes the transaction embodied in the structured settlement process which results in a structured settlement. Part of a structured settlement transaction involves the placement of a structured settlement annuity contract.
Structured Settlements 4Real®
A blog authored by John Darer which provides structured settlements information, structured settlement news, provocative commentary and opinion about structured settlements, settlement planning information, settlement planning issues and recovery management. Fresh structured settlement information and news from the settlement planning and litigation recovery management space added virtually every day. The mission of the blog is to help settlement professionals, financial professionals, lawyers, injured persons and their family members, guardians, survivors, judges, magistrates, special masters, mediators, administrators, trust companies, financial advisers, insurance regulators, government leaders, the media and other interested parties determine what is real in the structured settlements, settlement planning and litigation recovery management space.
A legal paper that is used to start a civil case and get jurisdiction over a party.
Items or services not deemed necessities of life such as food, shelter, and clothing.
Supplemental Needs Trust
Special Needs Trust
A surety bond guarantees to one party that another will perform specific acts. The surety generally becomes responsible for fulfillment of a contractual obligation of the original obligor defaults
The Surrogate’s Court is established in every county in the State of New York to hear cases involving the affairs of decedents, including the probate of wills, and the administration of estates and trust proceedings. Family, Supreme, and Surrogate’s Courts have concurrent jurisdiction over guardianships of the person and property of infants. For example, if there is a pending lawsuit in New York to recover for the loss of a loved one and there is a recovery, the Supreme Court of the State of New York may approve the amount of the settlement, but the Surrogate Court will likely be involved to approve distributions among a widow and her children.
T Bond Trust
Slang for United States Treasury Bond Funded Structured Settlement, a form of structured settlement which uses United States government obligations as a "qualified funding asset" under 130(d).
Tax Exempt Bond
Also known as a municipal bond. Interest on municipal securities is exempt from federal income taxation pursuant to Section 103 of the Internal Revenue Code. A tax exempt bond may or may not be exempt from state income or personal property taxation in the jurisdiction where issued. If the bond is exempt from state income tax, it possesses "double tax exempt" status. "Triple tax exempt" bonds are exempt from municipal or local income taxes, as well as from federal and state income taxes.
The percentage of income tax paid for differing levels of income.
An annuity payment option where payments continue for the life of the annuitant or the designated period, whichever is shorter. Also referred to as "temporary life annuity"
Temporary Life Annuity
A temporary life annuity is an annuity that pays only for life or a finite period of time, whichever is shorter. May be used as a funding mechanism for Medicare Set Asides to get the payments to equal the exact Medicare Set Aside Allocation, or may be used (pursuant to CPLR Articles 50A or 50B) to fund the future medicals, future pain & suffering and other life contingent elements of damages in New York judgments. A temporary life annuity can include level payments or have a fixed percentage increase associated with it.
Statements made by a witness or party under oath.
The Periodic Payment Settlement Act of 1982
The Act, also known as Public Law 97-143 or P.L. 97-143 codified all of the prior revenue rulings related to periodic payments to injured parties This law allowed defendants to assign their obligations (via a "qualified assignment") to make future periodic payments to a third party without retaining a future obligation to the injured party. This law enables the defendant to enter into a structured settlement without retaining a future obligation to the injured party because that obligation under the settlement agreement has been assigned to a third party. Claimants and plaintiffs benefited as well because , as a result of P.L. 97-143, there was an option where they no longer had to rely on the defendant going bust while holding the obligation to make periodic payments.
The Street.com Ratings
A rating agency of insurance companies that claims independence because it does not accept compensation from any of the entities that it rates or allow them to influence or to suppress the release of such ratings. Formerly known as Weiss Research.
Taxpayer Identification Number. Also known as Social Security Number ("SSN")
Legal recognition of the ownership of property, usually proven by a document.
Title XIX (Medicaid)
The title of the Social Security Act that contains the principal legislative authority for the Medicaid program and often a common name for the program.
Title XVIII (Medicare)
The title of the Social Security Act that contains the principal legislative authority for the Medicare program and often a common name for the program.
A body of the law which permits an injured person to recover compensation from the injuring party. When one person injures another, either intentionally or by negligence, a court may award money damages to the injured party so that they will suffer the pain caused by their action. A civil wrong or wrongful act, whether intentional or accidental, from which injury occurs to another. Torts include all negligence cases as well as intentional wrongs which result in harm.
The official written record of everything that was said at a court proceeding, a hearing, or a deposition.
Treasury Inflation Protection Securities(TIPS)
A form of government obligation or bond that provides protection against inflation. The principal of TIPS increase with inflation and decrease with deflation, as measured by the Consumer Price Index. When a TIPS matures, you are paid the adjusted principal or original principal, whichever is greater. TIPS pay interest twice a year, at a fixed rate. The rate is applied to the adjusted principal; so, like the principal, interest payments rise with inflation and fall with deflation. Source: United States Treasury
A fiduciary relationship which calls for the trustee to hold title to an asset for the benefit of the trust beneficiary. The grantor is the person who creates the trust and may or may not be the beneficiary.
A legal document that establishes a trust and outlines the rules and guidelines affecting its management and disposition by the trustee..
The individual or institution with responsibility for management of property placed in trust for the benefit of another individual. The trustee is bound by the provisions of the trust agreement.
Umbrella Liability Coverage
A form of liability insurance that provides protection to insureds for claims in excess of the primary policy limits. It is an important form of insurance coverage to protect assets and can be relatively inexpensive for the amount of coverage it provides.
United States Treasury Bond Funded Structured Settlement
A form of structured settlement which uses United States government obligations as a "qualified funding asset" under 130(d), For more information click here.
An annuity contract under which the annuity holder (or in the case of variable structure, the annuitant/payee) has the ability to allocate the consideration among several available investment choices. The annuity holder (or in the case of a variable structure, the annuitant/payee) assumes the investment risk associated with his/her decisions.
The court location.
A tax form for the United States which certified an individual's taxpayer identification number. A W-9 is generally required by financial institutions when opening an account to avoid back-up withholding. It is required for structuring attorney fees and in cases when structuring taxable damages.
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Work life expectancy
The period of time that an individual is expected, or would have been expected to remain in the workforce. One of the foundations of almost all forensic economic analyses that involve lost earnings, non-market services or valuation of pension benefits.
When a person's death is caused by the negligent or intentional act of a wrongdoer.
The rate of return on an asset
The graphical representation of interest rates over different maturities
Yield to Maturity
The average annualized rate of return that an investor will receive if a bond is held until maturity.
Any person sixteen (16) to eighteen (18) years of age.