Litigation

From the mouths of one of Stone Street Capital's "brightest"

"One question we hear rather regularly is what is the difference between a ?structured settlement? and an annuity.  A ?structured settlement? is defined as a tax advantaged financial settlement awarded to an injured party from a personal injury lawsuit, that is paid out over time rather than in one lump sum payment.  The agreement is generally between the defendant or their insurance company and the plaintiff who is the injured party.

A structured settlement will pay the injured party in regular intervals often monthly or quarterly over a set period of time which usually lasts 10-30 years depending on the circumstances. The settlement is funded by the purchase of an annuity that then pays the injured party. An annuity is the financial vehicle that usually funds a structured settlement".  "Will" on the Stone Street Blog

Comments

1. For the umpteenth time, settlements ARE NOT awards. Say my dog bites you on the butt, then after you sue me, some time down the road you agree to withdraw your case in exchange for $5,000 because, on further analysis, you were taunting my dog and well maybe he should have been on a leash that's called a settlement. I didn't award you anything. We agreed to compromise or settle. If you go before judge, jury or arbitration panel and THEY "set the price", then THAT is an "award".
2. The definition of structured settlement is reasonably accurate but where is a "structured settlement" defined the way. Will refers to "THE definition". Certainly for purposes of IRC 5891 ( the Internal Revenue Code section that governs Will's and his company's business) his definition is not accurate. How embarrassing for Will and for Stone Street Capital!
3. A structured settlement can be paid over the lifetime of the payee, a period which may be longer than 10-30 years.
4. IRC 130(d) permits a structured settlement to be funded with either or two qualified funding assets (1) an annuity or (2) an obligation of the United States government.
5. Will fails to answer the question he poses (i.e. what's the difference between a structured settlement and annuity). His definition of "annuity" reminds me of of this "Freda's boss" snippet from the Chevy Chase movie "Fletch"
6. This is what Stone Street call its blog "An educational, information exchange for the entire structured settlement industry". Here's another thought.. "If Stone Street Capital wants to keep lobbing S^&t up against the wall we'll just keep hitting them with a brick".