Legal complaints are already being filed after the devastating fires in Los Angeles and Ventura counties. Whether they will go forward as individual claims or as class actions is undecided. What is certain is that plaintiffs and/or attorneys in these cases have the option to structure the settlements or attorney fees they may receive.
How It Works. The defendant or its insurance company funds the settlement annuity through a life insurance company. The structured payments are made to the claimant or their attorney by an assignment company associated with the life insurance company.
Non-Qualified Structures. Structured settlements involving wildfire-related damages are “non-qualified” if there is no physical injury involved. While there is a tax component, they still offer significant benefits compared to a lump sum payout.
- The settlement or attorney fee grows tax-free within a structured annuity, increasing the overall amount the plaintiff or attorney receives.
- Annuity payments are taxable only when received, which may reduce the overall tax obligation depending on the tax bracket of the claimant or attorney.
- Claimants/attorneys can choose to receive a portion of their settlement/fee in a lump sum to pay for expenses and then structure the remaining portion—offering flexibility based on the needs of each claimant or attorney.
Call or contact me with questions about non-qualified structured settlement annuities to see if they might be right for your fire-related case.
Pat Farber
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