Structured Settlements 4Real®Blog 2026

Consider the Impact of Beneficiary Designations in Structured Settlements. Proceed carefully and thoughtfully.

A tale of two structured settlement beneficiary changes

In Monarch Life v. Estate of Tarone, No. 09-734, 2011 WL 1813665 (E.D.Pa., May 10, 2011), began as a routine interpleader action to determine who should receive payments from a structured settlement set up in or about 1984, following the death of payee William Tarone

Tarone’s settlement agreement specified that in the event of his death, the remaining guaranteed payments were to be made to his mother or, if she predeceased him, to his estate.  The agreement did not authorize Tarone to designate a different beneficiary.  Tarone nevertheless attempted to name his daughter, Laura Sipio, as beneficiary.  Tarone sent the annuity issuer, Monarch Life, a change of beneficiary form that presupposed that Tarone owned the annuity.  Monarch Life declined to make the change. 

According to a now removed NSSTA post after I originally posted this, under Mr. Tarone’s will the payments were to go to two unnamed  Bucks County Pennsylvania charities.  Unless I’m reading the NSSTA wrong they take credit for providing support to the Estate’s claim to the payments over the daughter’s claim to the payments.

I disagree with how the NSSTA originally spun this story regardless of it’s “charitable” intent.

The Tarone case highlights the perils of setting up a structured settlement without the ability to change the beneficary

1. The facts of the case seem to show that Tarone actually WANTED to leave the money to his daughter, Laura Sipio.

2. He submitted a change of beneficiary form. But for the fact that those responsible for setting the structure up did not give him this ability, the payments apparently could not go according to his wishes.

I wonder, did Tarone have the benefit of his own structured settlement consultant, in those pre-Weil lawsuit days? Obviously Tarone wanted to leave some money to charity, but his final intent would depend on observation of the date that the will was executed compared to the date he made an attempt to change the beneficiary by submitting the change of beneficiary form to Monarch Capital.

It’s hard to imagine setting up a structured settlement today without the ability to change the beneficiary.  A lot can happen in 27 years and one can imagine that Mr. Tarone was not married and had no children at the time the structure was set up.  At one stage many moons ago there was a thought among the forefathers in the industry that the ability to change a beneficiary was an indication of ownership that could affect the tax consequences of the structure. This is the reason why you see language in some settlement agreements which states that the designation must be in the proper form, that such changes must be made to and are in the discretion of the assignee but that such requests will not be unreasonably denied. Yet all personal injury cases you see the ability to change the beneficiary.

I submit to members of my profession  and to attorneys representing plaintiffs that little things like changing a beneficiary may have a long term impact, so please pay attention.

Another point of interest… but for a 1991 Bankruptcy Court ruling there might not have been any structured settlement payments for Laura Sipio or the Estate of Tarone even talk about. In that case, stemming from the Chapter 11 bankruptcy of Monarch Capital Corporation, a qualified assignment company with then approximately 175 structured settlements at the time of the bankruptcy (obviously including Tarone’s structure!). The Court concluded that the structured settlement payees could continue to be paid without violating  the automatic bankruptcy stay and without being subject to any claim on behalf of the bankruptcy estate  of Monarch Capital.

Download in_re_monarch_capital_structured_settlements_bankruptcy_case.pdf

Also notable is that the bankruptcy court protected the structured settlement payees’ rights even in the absence of secured creditor protections common in today’s structured settlements.

Contrast that with the Executive Life of New York situation where qualified assignments were still being made in 1987, to an entity with a published 40% of its assets in junk bonds and whose underwiting company had just received the biggest fine ever by the Insurance Department of the State of New York for sham reinsurance. The poor folks who likely did not have representation on the structured settlements other than their attorneys, had the misfortune to have had the obligation to pay them assumed by a now judgment proof entity.  I just received a call from one of those individuals today.

It really is “A Tale of Two Sh*tties”.

 Structured Settlements and The 1980s  “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity…”