Structured settlements and structured attorney fees provide tax-advantaged long-term income. But did you know that insurers and defendants can deny that option? Here’s how to prevent denial and preserve the right to structure.
When to Discuss a Structured Settlement with the Claimant
Ideally, the settlement consultant has met with the injured claimant before mediation. This provides time to determine the claimant’s long-term needs. The additional time also allows for assessing any potential roadblocks to settlement, including needs-based government benefit eligibility, bankruptcy, and probate. The consultant will walk the injured claimant and their family through settlement options to land on an ideal plan. At that point, it is time to move on to settlement negotiations.
When to Discuss a Structured Settlement with the Defendant/Insurer
One key roadblock occurs when, too early in negotiations, the plaintiff attorney says they will not discuss a structured settlement. In some instances, the defendant or insurance adjuster assumes disinterest in a structured settlement. Instead, the attorney could say that a structured settlement will not be discussed until the parties agree on a gross settlement number.
What to Include in the Agreed Upon Settlement Terms at Mediation
Once a gross settlement number has been determined, it is time to discuss a potential structure. Plaintiff’s counsel should have an agreement with the defense that includes terms along the following lines:
“Plaintiff will have the option to receive all or part of their settlement funds in a structured settlement annuity and/or market-based structured settlement. Such program(s) will be funded by defendant via wire transfer or check to the appropriate assignment company in exchange of a fully executed Settlement and Release Agreement and an Assignment document mutually agreed to by the parties. Plaintiff may work with the settlement consultant of their choice.”
Please note that there is specific structured settlement language that must be included in the final Release. Your settlement consultant will provide this to you at a later date. Should you fail to include this language in the Release, the claimant and/or plaintiff attorney will forfeit their right to structure the settlement funds and/or attorney contingency fees.
Avoid Any Confusion: Contact Sage Before Your Mediation
The key to ensuring the right to structure is timing. Contact your Sage settlement consultant as early in the case as possible so you can walk into mediation prepared.