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Title IX Cases and Structured Settlements


Perhaps given possible changes in federal enforcement of Title IX and the Clery Act under the Trump Administration we have been seeing a lot of activity in these types of cases.  Title IX of the Education Amendments of 1972 protects people from discrimination based on sex in education programs or activities which receive federal financial assistance.

 Many of these cases involve minors so the use of Structured Settlements is often discussed and used to settle these cases.

 We find that even in the cases of sexual abuse cases that many attorneys are not aware that most of these cases are "non-qualified" type cases.  This means that most of them do not qualify under Internal Revenue Code (IRC) 104(a)(2), which makes the interest accrued in structured settlements income tax free in the case of physical injury damages.  If there were physical injuries as well then the entire structured settlement, including interest would be income tax free.  However, this is a VERY gray area and must be handled carefully.  Make sure your settlement agreements contain language which clearly states that damages are being awarded as a result of physical sickness or injuries if this is the case.

 Even if your Title IX or other non-physical injury case does not involve any physical injuries you may still wish to consider a non-qualified structured settlement due to many advantages over a lump sum settlement such as:

  • Maximize Settlements and Minimize Taxes. Non-qualified structured settlements can defer the receipt of income into future years, potentially minimize exposure to AMT and avoid paying higher taxes in the current tax year. Tax issues can be very important in designing a financial resolution that satisfies all parties involved.
  • Save time and money. A structured settlement may eliminate the cost of ongoing litigation and claims expense by moving negotiations forward that have otherwise deadlocked. A negotiated settlement reduces the risk of large jury‐awarded damages

  • Transfer risk and reduce costs. A Non-qualified structured settlement can eliminate the risk of changes in investments or interest rates
  • Increased flexibility. The payment stream to the claimant can be designed to meet a variety of needs, including lump sums, immediate payments, deferrals, or some other combination.
If you have any questions or if we can assist you in any way please do not hesitate to contact us at (734) 433-1670 or cyril@whitehousellc.com

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