Structured Settlements with Inclusive Qualified Assignments

John Darer • May 29, 2022
inclusive qualified assignments

The purpose of a qualified assignment, the standard practice since the Periodic Payment Settlement Act of 1982, signed into law by President Reagan in January 1983, is to shift obligations to make future periodic payments from the Defendant, or his/her/its Insurer, to the qualified assignment company.  See 26 U.S. Code § 130 - Certain personal injury liability assignments


Why is a Qualified Assignment Even Necessary or Desired?


While they are generally willing to facilitate a structure, given that the total payout on a structured settlement will exceed the structured settlement funding amount, few Defendants or Insurers want to retain the contingent future periodic payment liability on their books. Neither would a qualified settlement fund trustee. A qualified assignment enables the Defendant or Insurer, or QSF trustee, to get a novation, with the qualified assignment company substituted as the obligor of the future periodic payments.  See flow chart at the bottom of the post.  Steps 2 and 3 show how a qualified assignment fits into the process of establishing a structured settlement.


A qualified assignment is battle tested. See Yerkes v. Cessna Aircraft Co., Civil Action No. 14-cv-05925 (D.N.J. Jun. 25, 2015).  In short, Yerkes entered into a structured settlement was established in the 1980s as part of the settlement of an air crash case when Yerkes was a teenager. The periodic payment obligation was assigned by way of a qualified assignment to junk bond fueled First Executive Corporation. Then the structured settlement annuity was funded with junk bond fueled Executive Life Insurance Company of New York (ELNY) that was liquidated in 2013. As a result, some annuitants, including Yerkes, suffering shortfalls. Yerkes' attempt at recovering from the Defendant he had released in the 1980s and its London Market insurers failed.  Yerkes has an action against his personal injury lawyers pending at the time of posting.


Inclusive Qualified Assignments


There are three types of Qualified Assignments


  1. Qualified Assignment (QA)                                         NOT INCLUSIVE
  2. Qualified Assignment & Release (QAR)                    INCLUSIVE
  3. Qualified Assignment Release & Pledge (QARP)     INCLUSIVE


All three forms of qualified assignment work in terms of substitution of obligors. In the context of this discussion about qualified assignments, the term "inclusive" refers to forms of qualified assignment that the plaintiff signs and is a party to.   The use of the non-inclusive QA has not been the standard business practice in the structured settlement industry for many years. The requirement of the Plaintiff’s signature on the QAR or QARP means that the Plaintiff or Plaintiff’s representative can proofread and review the document before signing. As such it is an inclusive humanistic business practice that increases the trust in the transaction. At the very least the plaintiff has the opportunity to review the final document before signing. 


Plaintiff and Defense oriented consultants often say "it is all about the plaintiff" in their messaging.  While many settlement consultants regularly use the QAR or QARP, there are some consultants, including plaintiff consultants in conjunction with their staffs, who are surprisingly still using the QA.  And it just may cause a problem one day if there is an error on the document that the plaintiff may have caught had they been given the opportunity to review the document and acknowledge with a signature, such as is required on the QAR and QARP.




how structured settlements work flow chart
By John Darer September 22, 2025
Weiss Ratings is Not Paid to Rate
By John Darer September 17, 2025
The Allure of "Convenience" is a Tax Trap . QSF Qualification is not a single moment in time, but rather a continuing obligation to operationalize all the requirements, as well as those required for creation.
qualifed assignment release and pledge agreement
By John Darer September 15, 2025
A Qualfied Assignment Release and Pledge Agreement (QARP) is a type of qualified assignment that gives a structured settlement payee a security interest in the qualified funding asset pursuant to the Uniform Commercial Code (UCC).
Indiiduals with Disabilities Education Act
By John Darer September 13, 2025
It bears remembering that, prior to 1975, children in the USA with intellectual disabilities, physical disabilities and even sensory disabilities were not guaranteed access to a public education.
structured settlement beneficiary
By John Darer CLU ChFC MSSC CeFT RSP CLTC September 12, 2025
"All payments From a Structured Settlement Are Guaranteed" ?
By John Darer September 6, 2025
Does a Structured Settlement Have a "Free Look" Period Like Other Insurance?
qualified settleent fund and QSF
By John Darer September 3, 2025
Invalidation of Structured Settlement Arrangements Under IRC § 130. If the QSF loses its status due to revocation/ termination of the governmental authority’s continuing jurisdiction, any structured settlement arrangements pursuant to IRC § 130 become null and void.
most infomative structured settlement websites
By John Darer August 26, 2025
The 4structures.com website is one of the most comprehensive structured settlement resources, particularly for those who want detailed, expert-level information, according to Google AI
most informative
By John Darer August 22, 2025
Based on Grok's review of prominent sites as of August 2025, 4structures.com (including its associated blog at structuredsettlements.typepad.com) stands out as the most comprehensive. Run by structured settlement expert John Darer, it offers detailed guides, and specialized insights
fountain
By John Darer August 17, 2025
Retained asset accounts for life insurance beneficaries, are temporary accounts that earn interest, give you time to breathe and give you time to figure it out.. Retained asset accounts are pay nterest from the date of death to date of settlement of the claim as a general practice,
More Posts