by John Darer® CLU ChFC MSSC CeFT® RSP CLTC
A Structured Settlement must be established as part of the settlement
Details of the structured settlement payments must be incorporated into the settlement documents as part of the consideration for the release of claims.
If you receive your settlement as a lump sum, you cannot structure later because, according to IRS rules, this is considered either “constructive receipt” (if a release has been signed but you’re waiting for the money and there are no other restrictions), or actual receipt (if the money has been paid).
Structured Settlement Documentation is crucial
Use of Qualified Settlement Fund (QSF)
The only exception to doing a structured settlement after a release has been signed is where there is a Qualified Settlement Fund, such as often found in the huge class action lawsuits against drug and product manufacturers where there are large numbers of plaintiffs.
Rev Proc 93-34
Rev. Proc. 93-34 permits a qualified assignment from a qualified settlement fund, thus enabling a structured settlement in a similar manner as if it were established at settlement with a single defendant or with the defendant’s insurer
A single claimant qualified settlement fund may however, may not bringb you the “Baskin Robbins” of structured settlement choices because some structured settlement annuity issuers and their qualified assignment companies generally do not participate in such cases.
Plaintiffs in litigation are in transition, having first suffered a loss, then gone through a long process of stops and starts as their case winds its way through the courts. Then a day will come as the case resolves at mediation,or sveral mediations, in a courthouse conference, in their lawyers office or in their living room, where the plaintiff has to make a decision that will have a major impact on their life.
For some plaintiffs its an overwhelming decision. That is why it is important to begin considering this option in advance of settlement as part of a pre-settlement planning process.
A Structured Settlement is a good option for plaintiffs seeking a stable income source as the bedrock of their financial security
A structured settlement is like a ‘job they can never be fired from“. In many cases the payments end up coming from a life insurance company that has been in business since the 19th century or the early 20th Century. Options for fixed increases, and indexed based on an objective formula tied to an index are possibole as well as other market based structured settlement solutions for plaintiffs or their lawyers who might be interested.
- Market Based Structured Settlements | How They Work (4structures.com)
- Prudential Income Advantage | Structured Settlement Index Linked (4structures.com)
- Pacific Life Introduces Payout Plus for Settlements – Structured Settlements 4Real®Blog 2026
- iStructure Select | Independent Life
Last updated September 3, 2026