Many non-physical injury recoveries can be structured in a similar manner as physical injury case recoveries. The primary difference is that physical injury recoveries are tax-free while non-physical injury recoveries are partially or fully taxable over time. Taxes owed on the interest earned from the settlement proceeds can be deferred until the interest is actually withdrawn.
Tax-deferred structured settlements can be used in a variety of cases including:
• Emotional distress, sexual harassment
• Employment discrimination and wrongful termination
• Property damage
• Construction defect
• Errors & Omissions
• Long-term disability
• Punitive damages
• Mass torts
• Lottery prizes
• Business disputes and partnership dissolutions
In both physical and non-physical injury cases, many of the structured settlement benefits to both the claimant and the defendant are the same:
• Structures resolve disputes before trial thus avoiding expensive and uncertain litigation outcomes.
• Structures can create flexible, customized periodic payment plans to fit the claimant’s future financial needs.
• Claimants can choose to receive tax savings through a structured settlement by receiving payouts in later, retirement years when tax rates are typically lower.
• Structures transfer investment risks from the claimant to the annuity provider.
• Claimants receive a fixed, guaranteed return from a highly rated financial entity.
Sample Tax-deferred Structured Settlements:
37-Year-Old Female Worker On-the-Job Sexual harassment Case
A 37-year old female worker at manufacturing plant was verbally abused and subjected to obscene jokes. The abusive work environment caused many women to quit. Others were simply denied promotions when they refused to grant sexual favors.
11-Year-Old Male, Case Involving Verbally Abusive Coach
A 11-year-old male was awarded $75,000 from a case involving a verbally abusive basketball coach. The constant bullying and verbal abuse at practices and games caused great damage to the boy. A tax-deferred education fund was purchased for the benefit of the minor.
50-Year-Old Male, Settlement for Lost Future Income & Pension Contributions
A 50-year-old firefighter was fired for allegedly making racially-motivated remarks. He sued the fire department for wrongful termination. The case settled prior to trial and an annuity was used to replace his lost future income and pension contributions.