by John Darer CLU ChFC MSSC CeFT RSP CLTC
If you're a plaintiff lawyer or trial lawyer and your client intends to have a structured settlement as part of the settlement you better be careful. The same goes for defense lawyers or defense attorneys and claims representative and executives.
A structured settlement requires a specific type of release, or specific language in the release which includes periodic payments as part of the consideration for the release
If a structured settlement is the intention of the parties, a settlement agreement or release where the consideration is something to the effect of "$XXXXXX.XX cash, the receipt and sufficiency of which is hereby acknowledged" is a release which could disqualify your client from favorable tax treatment. So be careful! There are other language requirements as well.
And defense counsel… you might not be off the hook either! How well do you understand the qualified assignment document and the ability to unwind it if certain conditions aren't satisfied.
Make sure you work with a structured settlement broker, structured settlement consultant, structured settlement expert or settlement planner who really understands these documents and can help articulate the reasons for certain requirements
Any suggestions that are made can be invaluable and protect you from needless grief, an unhappy client, or in the worst case a legal malpractice claim.
And if you've never done a structured settlement before, or rarely do them, swallow your pride and tell us. You'll be glad you did.
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