If Pre-Fund of Structured Settlement is Not Possible
What is Slide Language in a Settlement Agreement and Release?
Slide language is language inserted into a structured settlement agreement that helps facilitate the placement of a structured settlement where the defendant or insurer will not pre-fund and factors such as the need for Court approval make a precise funding date difficult to determine.
What Does Pre-Funding a Structured Settlement Mean?
Issuing a check or wire to fund a structured settlement in advance of receiving signed releases and/or Court approval. For those that choose to do so, the structured settlement annuityissuer will typically issue a letter that states that the advanced money will be refunded if the Court does not approve the settlement, or the settlement otherwise falls apart because the required documents do not arrive. The pre-funding is just for the amount representing the cost of the structured settlement premium , not the whole settlement.
When Would Pre-Funding a Structured Settlement be Desirable?
In a declining or volatile interest rate environment, where there is likely to be some delay in getting Court approval, where the Court needs to see the structured settlement benefits, where Court approval is the prerequisite to have the authority to sign documents.
Where excessive delays can cause lock in fees to add up. Some annuity issuers charge a lock in fee after 30, 50 or 90 days. One company has a fee free lock in period of 6 months. On large case the lock in fees can add up. Failure to plan ahead could mean problems without pre-funding.
Why Some Defendants/Insurers Won't Pre-Fund a Structured Settlement?
While some insurers who do a large number of structured settlements will routinely pre-fund structured settlements, because they are familiar with the structured settlement process, they are under no legal obligation to do so.
Couldn’t You Solve This Problem With a Qualified Settlement Fund
If you have a single claimant and are interested in the broadest selection of structured settlement annuity issuers, using a qualified settlement fund might not work.
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Last updated February 15, 2024
