How to Establish a Structured Settlement Annuity For Your Client

HomeStructured SettlementsHow to Establish a Structured Settlement Annuity For Your Client

A structured settlement annuity is a financial instrument that provides periodic payments over several years. Clients who want to maximize their settlement money might like to receive their settlement through a structured settlement annuity, especially to enjoy its tax-free benefit.

A couple of additional steps in settlement planning exist when a client wants to establish a structured settlement annuity.

First, clients need to come up with the design of the annuity. They have to outline the amount and the payment schedule when they want to receive those funds in the future. 

Next, language is added in the release agreements detailing the annuity’s cost, the future payment schedules, who the annuity company will be, the assignment company, and other information.

As part of the annuity setup process, the defendant and the entity paying the claim should sign a Qualified Assignment document. This document officiates the transfer of future payment obligations from the defendant to the annuity company. The annuity company accepts the responsibility of making future payments to the client’s annuity in exchange for a lump-sum payment from the defendant.

If the settlement must be approved by the court (e.g., when the client is a minor or an incapacitated individual), then specific language must be added to the petition and order. Court approval is necessary when the client is a minor or legally incompetent.

One more thing for attorneys to remember is that they can’t receive the amount going into the structured settlement annuity. It should go directly from the entity paying the claim to the annuity company’s assignment company. It doesn’t pass through the law firm’s IOLTA account.

An Outsourced Solution to Establishing a Structured Settlement Annuity

At Amicus Settlement Planners, we work with attorneys and clients who want to establish a structured settlement annuity. You can focus on more critical aspects of the case while your client undergoes the proper process for their annuity.

We can discuss the design annuity with you and your client, and then we can send you information that you can forward to the defense counsel for the release agreement that talks about the annuity. We can also prepare the Qualified Assignment document for you to send to the defendant or the annuity company paying the claim for their signature.

We can walk you through the entire process and give you the funding instructions, language for the release agreement, and everything else you need.

Please call us if your client is interested in a structured settlement annuity. We can help them design the annuity to provide for their long-term well-being – and we’ll provide you with everything you need to make it a smooth and easy process.

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