MetLife and the American Bar Association recently produced a new webinar, “Justice is Making Sure Your Client’s Employment Settlement Lasts.” The 23-minute video looks at the financial options available to clients receiving employment-related, non-physical injury settlements.
Structured settlements for non-physical injury employment litigation (also call non-qualified settlements) are similar to personal injury structured settlements. The key (and important) difference is that non-qualified settlement proceeds are not tax-except once withdrawn as are personal injury settlement proceeds. Instead, the money accrues tax-free in a settlement annuity until withdrawn at which time it becomes taxable.
Lump Sum Vs. Structured Payments
The webinar presenters discuss the pros and cons of receiving a settlement as an upfront lump sum or in periodic, structured payments. They explain why it is imdportant to discuss the client’s financial options early on in the settlement negotiation process. This decision should be made with great care. Once made, it cannot be undone—an initial lump sum payout can’t be converted into structured payments after a settlement is reached and a structured settlement can’t be converted into a cash payment without expensive consequences.
The webinar includes different employment settlement scenarios that look at the potential tax consequences of receiving the settlement in a lump sum versus in structured payments.
To view the video, click below or visit MetLife’s Video Center and select the appropriate video.
If you have any questions regarding structured settlements for employment-related non-physical injury cases, please feel free to call–Enrique