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
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