Once a case settles in your client’s favor, how can you be sure that the structured settlement payments will be distributed properly? That’s the job of the structured settlement broker. Brokers are responsible for payment set-up and coordination. As the attorney for the plaintiff, you have a right to use your own broker for these tasks even when defense counsel brings in one of their own during settlement talks.
Here’s what happens after settlement papers are signed.
Since your broker is involved in consultations during settlement negotiations, by the time a structured settlement is reached, the broker is ready to get the payment process rolling. The settlement dollar amount, the extent of the injuries and the claimant’s current and future financial needs dictate the payment distribution schedule.
Finding The Right Life Insurance Company. Most settlements are straight forward. The broker will contact highly rated life insurance companies that issue structured settlement annuities, seeking the best interest rates and options that fit the client’s needs. Once the insurance company is selected, the broker will then purchase an annuity with the structured settlement funds.
The issuing life insurance company guarantees the annuity payments. Insurance companies that sell annuities must follow strict state insurance laws to ensure that the insurance companies have enough assets on hand to cover their annuity obligations.
The injured party does not own the annuity. Instead, the annuity is managed by an assignment company that is responsible for making scheduled payments to the claimant. Payments can begin within a month after settlement documents are signed.
Special Needs Trusts. When circumstances dictate, the broker will bring in an expert to place the structured settlements into a Special Needs Trust (SNT) to assure that an injured individual can maintain eligibility for current or future Medicaid and SSI benefits while still receiving settlements payments.
With structured settlement annuities, claimants do not have to worry about market fluctuations affecting their settlement payments. Payment amounts are locked in no matter the economic climate. Clients can rest assured that they will receive guaranteed, tax-free payments as laid out in the settlement documents.
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