Litigation

Structured Settlements ARE NOT owned by Special Needs Trusts

By John Darer

When a structured settlement is used in conjunction with a Special Needs Trust or Supplemental Needs Trust the annuity owner IS NOT the Special Needs Trust or the Supplemental Needs Trust. The Special Needs trust is the recipient of the structured settlement payments. One could say that it is the owner of the structured settlement payment rights, but NOT the owner of the annuity itself.

The owner of the structured annuity is either the Defendant or its Insurer, if there has been no qualified assignment of the periodic payment obligation. If there has been a qualified assignment, as would be the majority of cases, the owner of the structured annuity is the qualified assignment company.If the structured settlement uses United States Treasury obligations, as an alternative permissible qualified funding instrument, the answer remains the same. Those assets are similarly owned by the qualified assignment company.

Some attorneys feel that the failure of the Social Security Administration (SSA) to specifically address structured settlements (as opposed to just plain old annuities) by DEFRA 2005 through subsequent POMS is a reason not to use structured settlements in this manner. Others do not. Click here for more about why a structured settlement may be useful in conjunction with a Special Needs Trust or Supplemental Needs Trust.

Full post as published by Structured Settlements 4Real on August 28, 2008 (boomark / email).