Frequently Asked Questions
Regarding Tax Free Benefits
Can Children or even Nephews and Nieces of a Physically Injured
Person Receive Annuity Payments Income Tax Free?
Can
a structured settlement be tax free to the claimant if the claimant or his/her attorney
knows the cost of the structure?
Can
the claimant purchase a single premium annuity after the settlement, thereby by-passing
the defense?
A
claimant may purchase an annuity policy with their settlement dollars
after the closing documents have been signed, but without the income tax
free advantages afforded by
IRC
Section 104(a)(2). In order to take full advantage of
Section 104 the
defense must cooperate in purchasing, guaranteeing and assigning the annuity contract.
Claimants may not exert any "control" over the annuity contract in order to be
assured of tax free payments. In certain instances, where there is more than one
claimant, they may elect to file under
IRC
Section
468(b) as a Qualified
Settlement Fund, which is more fully explained later.
The claim
involved emotional trauma, but no physical injury. Can the settlement be structured tax
free?
How are
Veteran benefits affected by a structured settlement?
Is
it better to name a specific person as the beneficiary of the guaranteed benefits of the
annuity or the estate of the annuitant?
