by John Darer CLU ChFC CSSC
Epitaph for a would-be structured settlement:
Documentation that says in pertinent part ” For the consideration of Five Hundred Thousand ($500,000.00) the receipt and sufficiency of which is hereby acknowledged, plaintiff hereby releases, remises…
” Plaintiff has been advised by counsel…
Followed by client’s signature
Action Followed by fax to defense counsel.
CONSTRUCTIVE RECEIPT
Two big words. Add one fatal tax principle. Possible E&O Claim.
Practice Tip for Plaintiff Lawyers: If your client is going to structure then the consideration must include the obligation to make periodic payments not the cost of the payments.
Practice Tip for Defense Lawyers: Qualified assignments include an escape hatch for the qualified assignment company if IRC 130(c) is not satisfied. It’s straight forward to satisfy IRC 130(c). Make sure that the consideration does not conflict with terms of IRC 130.
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