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Showing posts from August, 2021

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


  We were recently engaged by one of our personal injury attorney clients to help her defer taxes on a personal injury settlement for a portion of her fees.  She is 61 years old and invested $200,000 of her fees into the attorney fee structured settlement annuity with A++ rated New York Life Insurance Company.  We assisted her in finding the safest and most competitive annuity company.  Her client, the injured party, did not structure any of their recovery. For her investment New York Life will pay her $976.99 for her LIFE, guaranteed for 20 years beginning on April 2, 2024 and she  will  only owe income tax on the amount from the annuity which she receives in that year!  For example, she owes zero income tax on the original $200,000 invested in the annuity because she did not constructively receive that income, it went straight to New York Life. She only begins to pay income tax on the $11,723.88 (the monthly amount of $976.99 multiplied by 12 months in a year) beginning on April 2, 2