by John Darer CLU ChFC MSSC CeFT RSP CLTC
It's was a bit hard to believe, but one structured settlement industry website at the time of publication had things all discombobulated in relation to how structured settlement payments are negotiated and the sequencing when structured settlements are established:
"When a case involves personal injury, the amount of money necessary to cover the victim's medical care and living costs is negotiated between the plaintiff and defendant. To ensure that plaintiffs receive the best settlement possible, it is essential to involve a structured settlement expert, who will work in the client's best interests and find a plan that works for them.
Once this agreement is made, the defendant funds a stream of payments to the plaintiff, according to specific needs. In most cases, the defendant then transfers the responsibility to a "qualified assignment," which funds the damage payments with an annuity" they said.
Let's do a deep dive into the structured settlement process.
THE STRUCTURED SETTLEMENT PROCESS
What it is Not
- The Defendant does not first fund a stream of payments and then transfer the responsibility to a "qualified assignment".
- A "qualified assignment" is a process defined under Section 130(c) of the United States Internal Revenue Code. It is not a legal entity. However an assignment company is!
What it is
- The structured settlement process is more accurately depicted in the following flow chart and How Structured Settlements Work | Structured Settlements Explained (4structures.com).
- Note that the annuity purchase comes in Step 3 (Purchase of Qualified Funding Asset pursuant to IRC 130(d)
It's important that those who are establishing structured settlements for injured parties and their attorneys be able to articulate what they are selling accurately.
For more information visit
Learn About Structured Settlements in our Videos (4structures.com)
4structures Structured Settlement Experts – YouTube
or call John Darer at 888-325-8640
Last updated May 17, 2025
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