STRUCTURED SETTLEMENTS IN CASING by Thomas D. Begley, Jr.

                It is possible to use a structured settlement in cases not involving physical injuries.  In those cases, the assignment is a non-qualified assignment that does not take advantage of the tax benefits of I.R.C. §130.  There are three companies, BARCO, NABCO, and PRUCO, each incorporated in

Barbados

that will serve as non-qualified assignees. 

                                •              Types of Cases.  Typical cases that might be appropriate for non-qualified assignments include the following:

                                                ◦              punitive damages;

                                                ◦              legal malpractice;

                                                ◦              construction defect;

                                                ◦              contract dispute;

                                                ◦              environmental;

                                                ◦              lottery annuity obligations;

                                                ◦              employment discrimination;

                                                ◦              non-wage related;

                                                ◦              attorney’s fees (including stand alone).[1]

                                •              Matrimonial Settlements.  Non-qualified assignments may be appropriate in a matrimonial settlement.  The structured settlement ensures that the spouse receiving alimony or payment of equitable distribution on a periodic basis or the child receiving child support will receive those payments on time, thereby reducing the cost of new court proceedings to resolve issues that may arise.  In cases involving a disabled party, a rated age may be used so that a higher monthly payment can be achieved with a smaller lump sum payment.

                                                The obligations of child support, equitable distribution or alimony can be transferred to BARCO, NABCO, and PRUCO, which then purchase annuities.  BARCO purchases annuities from Liberty Life Assurance Company of

Boston

, NABCO purchases from Allstate Life Insurance Company or Allstate Life Insurance Company of

New York

, and PRUCO purchases annuities from Prudential Insurance Company of

America

.  In the case of NABCO or PRUCO, if there is a Guarantee Letter issued by a U.S. company to the effect that if the non-qualified assignee fails in its obligations, all parties are protected independent of the annuity contract.[2]

Thomas D. Begley, Jr., CELA

Begley & Bookbinder, PC

ATTORNEYS AT LAW

COMMITTED TO EXCELLENCE

Specializing in Elder & Disability Law

     www.begleylawyer.com

(800) 533-7227

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[1] www.ringlerassociates.com

[2] Structured Settlements 4Real: What’s Real on Structured Settlements and Settlement Planning?, Aug. 1, 2006, http://structuredsettlements.typedpad.com.