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?

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?

It is usually better for the estate of the annuitant to be named as beneficiary of the guaranteed benefits. Such a designation allows the annuitant, through their last will, to specify one or more beneficiaries or even a testamentary trust. This allows for very customized estate planning as well as allowing the annuitant to adjust the beneficiary or beneficiaries over their lifetime. Naming a specific person as the beneficiary, without requesting permission for future change, creates a more difficult scenario if the annuitant wishes to change the beneficiary in the future. The owner of the annuity must be consulted and due consideration given to the fact that the settlement agreement would not be consistent with the requested change.