What is a Settlement Agreement and Release (SAR)?
John Darer • February 11, 2025
The important role of a release in establishing a structured settlement
A settlement is a compromise between parties to
a legal dispute or lawsuit
A settlement may be reached before, during or after a trial.
- The terms of settlement and the rights and responsibilities of the parties are memorialized in a document called a Settlement Agreement and Release.
- A Settlement Agreement and Release is an enforceable promise not to proceed with a legal claim in exchange for compensation in cash and/or future periodic payments (structured settlement).
- A structured settlement offers safe, secure and guaranteed income for payees.
- There are also tax advantages. In order to receive tax advantages of structured settlements, the Settlement Agreement and Release must be drafted carefully so that the future periodic payments are part of the considerati8on for the settlement. Please refer to the structured settlement flow chart below.
A Settlement Agreement and Release may also be known as
- Confidential Release and Settlement Agreement
- Periodic Payment Settlement Agreement and Release of All Claims
- Settlement Agreement and Release of All Claims
- Settlement Agreement and Mutual Release
Last updated February 11, 2025
The cap rate on index linked structured settlement annuities is a limit set by the insurance company on the maximum interest rate that can be credited to the annuity based on the performance of the underlying index that also helps provide the downside prtection..
Do your financial resources give you enough road, or will the road run out before you do? A structured settlement annuity helps mitigate the risk of outliving your savings, no matter how long you live. A structured settlement can inlcude one or more customized payment streams and types.
USAA Life Insurance Company, an A++ rated insurance company, issues structured settlement annuities with 1%, 2% and 3% COLAs. USAA Life structured settlements are exceptionally compatitive on lifetime benefit payments with long duration certain periods for ages under 35.
Owners of highly appreciated NY businesses or NY real estate may benefit from a structured installment sale tax deferral program as an alternative to a 1031 exchange. MetLife's structured installment sale program is now available in NY and in all 50 states. Call 888-325-8640 for more info
A qualified assignment is part of the process to establish a structured settlement that enables a Defendant, Insurer, or Qualified Settlement Fund, to achieve a complete novation of the future periodic payment claim established by suit or agreement, through a substitution of obligors.
An annuity and a structured settlement walked into a bar, how do you tell them apart? 4structures' John Darer reviews the differences for you right here.
A lifetime structured settlement annuity turns part of your settlement recovery into guaranteed income you can’t outlive that is contractually guaranteed by a regulated life insurance company. A lifetime annuity is sometimes referred to as longevity insurance.
Structured settlement annuities can be very helpful to the budgeting process by providing guaranteed income streams and deferred lump sum payments tailored to specific budget needs and time frames identified in the settlement planning process.
Structured settlement receivables are often deceptfully marketed to investors as annuities. When the originating structured settlement factoring company buys structured settlement payments in a structured settlement factoring transaction, they are buying a receivable not an annuity.
Avoid constructive receipt if a structured settllement or structured attorney fee is to be established. Care must be taken to avoid constructive receipt.
