Historically, structured settlements have been used primarily to resolve physical tort cases. Now, this periodic payment concept can be used for resolving many types of commercial disputes or facilitating the sale of a business or property on an installment sale basis. These are called Non-Qualified Annuities (NQAs).
In any transaction where the parties would benefit by receiving an annuity stream rather than up-front cash alone, an NQA can be used.
• Structured Installment Sales
• Appreciated real estate property sales
• Sale or purchase of a business
• Employment and Labor related cases
• Construction Defect litigation
• Environmental litigation
• Punitive damages
• Sexual Harassment claims
• Non-physical injuries
• False Arrest/Imprisonment
• Pre August 5, 1997 WC claims
• Disability Policy Buy-outs
• Property Disputes
• Breach of Contract
• Lottery/Contest Winners
• Fraud Claims
• Psychological Damage Claims
• Divorce Settlements
For Non-Qualified Annuities, a corporate assignment company receives financial consideration from the original responsible party or buyer and subsequently purchases an NQA to fund the future payment obligations.
NQAs can offer significant tax benefits, enhanced rates of return and flexibility of timing of the periodic payments, among other benefits, such as:
• Income can be deferred into future years thus avoiding paying potentially higher taxes in the current tax year. Tax management can be very important in designing a financial resolution that satisfies all parties.
• In an installment sale, NQAs transfer the responsibility of future payments to a financially sound assignment company, addressing the risk of future payments not being made.
• Competitive rates of return are achieved by selecting among several highly rated insurers. The future promised periodic payments are not subject to either interest rate risks or market fluctuations.