ARE STRUCTURED SETTLEMENTS TAX-FREE?

Yes. According to Section 104(a)(2) of the IRS code, the amount of any damages (other than punitive) received by the claimant (whether by suit or agreement and whether as lumps or as periodic payments) on account of personal physical injuries or sickness may be placed into a structured settlement.

WHAT IS THE SMALLEST AMOUNT OF FUNDS THAT CAN BE PLACED INTO A STRUCTURED SETTLEMENT?

The minimum value that can be placed into a structured settlement currently is $5,000.  Most companies, however, have a minimum of $10,000.  This amount varies amongst all of the available A+ life companies which provide structured settlements.

WHEN INTEREST RATES ARE LOW, SHOULD YOU STILL PLACE FUNDS IN A STRUCTURED SETTLEMENT?

It depends on the claimant’s needs.  For example, if a minor has received funds in a settlement, then he or she will likely need to have funds saved for college.  A structured settlement provides a guaranteed, tax-free income stream which the claimant can count on.

If the claimant is an adult, then he or she may want to place a portion of their funds into a structured settlement.  Structured settlements provide a worry-free income stream.  Street Settlements only works with the safest and highest rated life companies in the market.

CAN A CLAIMANT PURCHASE A STRUCTURED SETTLEMENT IF HIS OR HER FUNDS ARE SITTING IN THEIR PLAINTIFF ATTORNEY'S IOLTA (INTEREST ON LAWYERS TRUST ACCOUNT)? 

In short, no.  Life companies that offer structured settlements generally will not accept funds from a Plaintiff Attorney's IOLTA account.  Most, if not all, insurance companies believe funds must come from the defendant/s or the defendant's carrier/s to enjoy tax-free treatment under Section 104(a)(2) of the IRS code.  

 WHAT IS A RATED AGE?

 If the claimant suffered injuries that will likely reduce his or her life expectancy, they likely will be able to enjoy a better interest rate on their lifetime payments in their structured settlement via obtaining a “rated age.”  Rated ages vary depending on which life company you choose to structure with.  Street Settlements will consider rated ages by all available life companies in determining which company provides the claimant's best return rate.

 WHEN INTEREST RATES ARE LOW, SHOULD YOU STILL PLACE FUNDS IN A STRUCTURED SETTLEMENT?

It depends on the claimant’s needs.  For example, if a minor has received funds in a settlement, then he or she will likely need to have funds saved for college.  A structured settlement provides a guaranteed, tax-free income stream that the claimant can count on.

If the claimant is an adult, they may want to place a portion of their funds into a structured settlement.  Structured settlements provide a worry-free income stream.  Street Settlements only works with the safest and highest-rated life companies in the market.

CAN A CLAIMANT PURCHASE A STRUCTURED SETTLEMENT IF HIS OR HER FUNDS ARE SITTING IN THEIR PLAINTIFF ATTORNEY'S IOLTA (INTEREST ON LAWYERS TRUST ACCOUNT)? 

In short, no.  Life companies which offer structured settlements generally will not accept funds from a Plaintiff Attorney's IOLTA account.  Most, if not all, insurance companies believe funds must come from the defendant/s or the defendant's carrier/s to enjoy tax-free treatment under Section 104(a)(2) of the IRS code.  

IS A STRUCTURED SETTLEMENT A GOOD IDEA FOR YOU OR YOUR CLIENT?

 1.  If a minor receives more than $5,000 in a personal injury case, the answer is likely yes.  Depending on the claimant's specific needs, a structure is often a suitable investment.

2.  If a claimant of any age is looking to place some of her/his funds from a personal injury settlement in a low-risk, creditor-protected, guaranteed income stream, the answer is likely yes.

3.  If a claimant is under 65, disabled, on Medicaid, and needs to set up a Special Needs Trust, the answer is still likely yes.  Street Settlements can set up a plan for part of the settlement proceeds to fund into the client's special needs trust via a structured settlement for the claimant to maintain their government benefits.