Skip to main content

Structured Settlement Annuity Non-Qualified Assignment 1

What is a Non-Qualified Assignment? 

The Non-Qualified Assignment (NQA) product is designed to accept the transfer of a periodic payment obligation for cases that fall outside of personal physical injury claims and litigation as defined under IRC Section 104(a)(2) and are not eligible for an IRC Section 130 qualified assignment.  Below is one example of how a NQA could be used to resolve an Attorney Fee Contract Dispute.

Case Study: Contract Dispute

Situation

John, a city bus driver, fails to fully stop at an intersection and collides with another vehicle.

The collision was minor, however, there were 20 passengers who incurred minor injuries. Seven of the injured passengers are represented by Attorney Heather Towne; the remaining 13 are represented by Attorney Richard Wright.

During the mediation, Wright disputes the initial plan of a 50/50 allocation split for their attorney fees. Further, both attorneys differ on how they prefer their individual fees be disbursed: Attorney Wright wants to structure his fees, while Attorney Towne has decided that a lump sum will best suit her needs.

Settlement

There is a two-part settlement.

1. Injury Settlement

The bus company and the 20 claimants agree to settle for $200,000. To resolve its own suit with the injured passengers and the allocation dispute amongst the attorneys, the bus company issues the total $200,000 to Attorney Towne who will be responsible for distributing the funds to each claimant. All claimants opt to receive their settlement awardsin cash.

2. Attorney Contract Dispute

Then, the attorneys settle their own dispute by executing a separate settlement agreement with Attorney Towne now acting as the defendant and Attorney Wright, the claimant.

Solution

Both attorneys ultimately agree on the 65/35 allocation split of attorney fees. Towne takes her portion of the fees in upfront cash. Afterwards, Towne uses the remaining settlement proceeds that were originally allocated to Wright for his portion of the fees to fund an NQA that will issue annual payments to Wright over the next ten years.

Why NQA?

Consistent cash flow with a trusted, highly rated carrier: Winning a settlement can make a difference in an attorney’s life and business. By agreeing with Towne to purchase an NQA annuity through Met Tower Life, Wright will receive a steady stream of income immune to market volatility. This will help support his business for years beyond the settlement.

For 20 years we have been Michigan's premier and ONLY Plaintiff Focused Structured Settlement Consultant. 

Please contact us early at (734) 433-1670 or cyril@whitehousellc.com and let us help you and your clients maximize your hard earned settlement dollars call!  www.whitehousellc.com

Comments

whitleaquickle said…
Buy and Sell Titanium trim from Tieta-Ned and others
Tieta-Ned is an Italian luxury car titanium dog teeth car titanium stronger than steel manufacturer that supplies customized raw titanium in-house performance tires venza titanium glow and carbon fiber wheels. titanium nose jewelry

Popular posts from this blog

Using a structured settlement annuity pre-suit

 We recently were engaged by the Guardian Ad Litem (GAL) in the case of an 11 year old boy who was struck by a care while riding his bike.  The father of the boy settled the case directly with the liability auto insurance carrier pre-suit and the GAL contacted us to ensure that the boy's settlement funds were handled appropriately. The case settled for a total of $65,000 and $59,000 was being allocated to the structured settlement annuity for the boy as follows: $5,000 paid immediately upon settlement $10,000 at age 18 $20,000 at age 21 $25,000 at age 25 $35,718 at age 30 this is total benefits of $95,718! The annuity was placed with a large life insurance company rated A+ by the A.M. Best rating agency and provided the family and GAL with the peace of mind that the young man would not receive the entire amount at age 18. In addition, due to the use of the structured settlement annuity, all of the interest gained during the payout period ($31,718 to be exact) is INCOME TAX FREE!  T

Michigan Association of Justice Workers Compensation Seminar

We had an awesome time at the Michigan Association of Justice Worker's Compensation seminar where Cyril spoke on the best strategies for using structured settlements in Worker's Compensation cases. Click the link below to watch the short video of his presentation!   Click Here to Watch Video! www.whitehousellc.com

COVID will not stop us providing unique settlement solutions using structured settlement annuities!

I hope that you are doing well! We just FINALLY completed the settlement of a case for a minor (age 17) that we were initially engaged by our plaintiff attorney client in February 2021, to provide structured settlement annuity quotes! Although the claimant was very close to the age of majority the key to the case was not giving him all of the settlement proceeds, which was over $120,000, at age 18. Having been in this business for over 20 years I cannot tell you the number of sad cases we have witnessed where the young claimant receives their settlement proceeds at age 18 only to blow through all the funds before anyone can blink and make bad decisions with the proceeds! This case involved two liability insurance carriers Liberty Mutual and Member Select. We coordinated multiple rounds of document revisions and had to have a separate set of different documents for each insurance carrier. In addition, one of the carriers would not fund the annuity until we had a fully executed court ord